Is a trade done in forex when (Ask price = 1) < (Bid price = 2)? and in which price?
Is a trade done in forex when (Ask price = 1) < (Bid price = 2)? and in which price?
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sadegh yeganeh zadeh · External communityPost link
External question — Personal Finance Stack Exchange
Author: sadegh yeganeh zadeh
Original post: https://money.stackexchange.com/questions/149543
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
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In forex market, in a normal mode when
Ask
=
Bid
, trade is done.
And If
Ask = 2
(the lowest price by sellers) >
Bid = 1
(the highest price by buyers), so the market is not liquid and no trade would be done because no Bid/Ask price is matched.
But what if
Ask = 1
<
Bid = 2
?
And in which price the trade would be done?
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base64 · External communityPost link
External answer — Personal Finance Stack Exchange
Author: base64
Original post: https://money.stackexchange.com/a/149545
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
Adaptation: HTML converted to plain text; contact email addresses removed.
A Market Order or
Marketable
Limit Order does not "enter" the order book.
If the incoming order is "better than or equal to" the other side of existing order book, the trade will be executed
instantly
at the price quoted by the
existing
orders.
This means if the existing Ask = 1, Bid < Ask, and suddenly an incoming buy order = 2 comes in, the trade will be executed at 1, and the order book & quotation never shows Bid = 2. Assuming that the existing quantity available at the one best price is more than or equal to the incoming order. Whichever is existing is the price.
There is no such thing as a Buy order and Sell order submitted "at the same time". The system tracks the sequence in addition to timestamp.
In summary, the quotations of Bid is always < Ask for Forex.
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Quoted from Forex.com.bd-Editorial External answer — Personal Finance Stack Exchange Author: base64 Source score (net votes, not local likes): 2 Original post: https://money.stackexchange.com/a/149545 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. A Market Order or Marketable Limit Order does not "enter" the order book. If the incoming order is "better than or equal to" the other side of existing order book, the trade will be executed instantly at the price quoted by the existing orders. This means if the existing Ask = 1, Bid < Ask, and suddenly an incoming buy order = 2 comes in, the trade will be executed at 1, and the order book & quotation never shows Bid = 2. Assuming that the existing quantity available at the one best price is more than or equal to the incoming order. Whichever is existing is the price. There is no such thing as a Buy order and Sell order submitted "at the same time". The system tracks the sequence in addition to timestamp. In summary, the quotations of Bid is always < Ask for Forex.
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