Why bid price is used while calculating Forex cross rates?

External question — Personal Finance Stack Exchange Author: KnowledgeSeeeker Original post: https://money.stackexchange.com/questions/150881 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I was trying to understand how Forex cross rates work. Different articles on internet uses bid price of currency to identify it's current value. My question is, why do they chose bid price and not offer price? Usually a common stock's price is measured by its last traded value. Why don't we do the same in case of forex trading? Apologies if it is an illogical question. I am a beginner in this field.

External answer — Personal Finance Stack Exchange Author: Grade 'Eh' Bacon Original post: https://money.stackexchange.com/a/150885 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. The bid price indicated on a live forex market [there are many - no universal source of data compared to a stock listed on a trading exchange] shows you the trade value available to you right now . A midpoint between bid and ask, or a 'most recent traded' rate [hard to quantify since there is no single exchange, but you could theoretically show the most recent traded rate within a given data set] shows you a theoretical value, not a value you could actually act on. You say that a stock's price is typically measured by its last traded value - but that is in the context of representing the value of that currency in a general sense . If you were to actually sell that stock, you would sell it for the current bid price; if you were to actually buy that stock, you would pay the current ask price. When calculating how to get from USD:GBP:CAD, you would need to use the actual ask price [or, from the other side, the bid price]. For other purposes, such as accounting for the value of a forex asset, sure you could use a midpoint.