What is “rate”?
The tender offer is the offer of the investor, trader or dealer to purchase securities, goods or currency. It provides, as the price a potential buyer is willing to pay and how much to be purchased for this price. The application also refers to the price at which a market maker is willing to buy; in contrast to the retail buyer, the market maker also displays the ask price.
The BID is the price action in the market for a buyer, and the ask is the price a seller is willing to accept; the difference between the two at this point in time is called a spread. When the purchase is made at the price bid, as the BID and ask prices to move higher to the next transaction, if the sellers perceive a good demand.
The spread between the BID and ask is a measure of the supply and demand for the financial instrument involved. Moreover, the interest of investors, the narrower the spread. In stock trading, the spread is constantly changing as buyers and sellers match up in electronic format; the size of the spread in dollars and cents reflects the cost of shares being traded. For example, a spread of $0.25 to a price of $10 is 2.5%, but only by 0.25% if the stock price is $100.
In foreign currency, the standard BID-ask spread in EUR/USD on the interbank market quotes up to two to four items – price to move in a given exchange, depending on the quantity traded and the time of day; spreads tend to narrow in the morning in new York when the European market opened. For example, the rate is usually accompanied by 1.1015 to 1.1017 ask and 1.019. Standard dollar/yen BID-ask spread to 106.20 106.18. Currency pairs that are traded less actively, have wider spreads.
Market-makers, sometimes referred to as specialists on stock exchanges, are crucial to the efficiency and liquidity of the market. Quote ask and BID prices, they go to the stock market, where an electronic pricing fails and they allow investors to buy or sell a security. Professionals should always set a price in stock, they sell, but there are no restrictions on the BID-ask spread.
In the currency market, the function of the interbank traders, and market makers because they provide a continuous flow of bilateral prices as a direct counterparty and electronic trading system. Their spreads widen during market instability and uncertainty and, unlike their counterparts in the stock market, they are not required to make the price in a market where liquidity has dried up.