What is a Two-Way Quote?

A two-way quote is a price quotation in financial markets that includes both:

1. Bid Price – The price at which a market maker or broker is willing to buy an asset.
2. Ask (Offer) Price – The price at which a market maker or broker is willing to sell an asset.

A two-way quote provides liquidity and transparency in trading, allowing market participants to see both buying and selling prices in real-time.

How a Two-Way Quote Works

Example: A forex broker provides a two-way quote for EUR/USD: 1.1050/1.10521.1050 / 1.1052

• 1.1050 → Bid Price (You sell at this price)
• 1.1052 → Ask Price (You buy at this price)
• Spread = 0.0002 (2 pips) → The difference between bid and ask prices.

Market makers and liquidity providers continuously update two-way quotes based on supply and demand dynamics.

Where Are Two-Way Quotes Used?

✅ Forex Trading – All currency pairs have two-way quotes (e.g., GBP/USD 1.2500 / 1.2502).
✅ Stock Markets – Market makers quote bid/ask prices for stocks.
✅ Bond Markets – Investors buy/sell bonds at quoted two-way prices.
✅ Commodities & Crypto – Used for precious metals, oil, Bitcoin, etc.

Importance of Two-Way Quotes

• Ensures Market Liquidity – Traders can enter and exit positions efficiently.
• Provides Transparent Pricing – Real-time bid/ask prices allow informed decisions.
• Indicates Market Sentiment – A narrow spread signals high liquidity, while a wide spread indicates low liquidity or volatility.

Two-Way Quote vs. One-Way Quote

Feature	Two-Way Quote	One-Way Quote
Includes Bid & Ask Prices?	Yes	No
Used in Forex & Stocks?	Yes	Less common
Better for Traders?	Yes, provides transparency	No, lacks full pricing info

FAQs

What is a two-way quote?

A two-way quote provides both a bid price (buy) and an ask price (sell) for an asset.

Why are two-way quotes important?

They ensure liquidity, price transparency, and efficient trading.

What is the difference between bid and ask prices?

• Bid price – The price at which buyers are willing to buy.
• Ask price – The price at which sellers are willing to sell.

What is the bid-ask spread?

The difference between the bid and ask price, representing the transaction cost.

Do two-way quotes apply to all markets?

Yes, they are used in forex, stocks, bonds, commodities, and crypto markets.

Why do bid and ask prices change?

They fluctuate due to market supply, demand, and volatility.

Are narrower bid-ask spreads better?

Yes, they indicate higher liquidity and lower trading costs.

Can retail traders provide two-way quotes?

No, only market makers and brokers provide two-way quotes.

What happens if I place an order between bid and ask prices?

Your order becomes a limit order and will execute only if a counterparty matches your price.

How does a two-way quote impact trading decisions?

It helps traders decide whether to buy, sell, or wait based on market liquidity and spreads.