Left-Hand Side

AAA

DEFINITION of 'Left-Hand Side'

The bid side in a two-way price quote. A two-way price quote denotes both the bid price and the ask price of a security. The left-hand side or bid indicates the price at which the dealer or market maker is willing to buy a security or currency, and the right-hand side or ask indicates the price at which the dealer or market maker is willing to sell the security or currency.

BREAKING DOWN 'Left-Hand Side'

For example, in currency trading, a two-way price quote could be US$1 = 1.0500 / C$1.0510. The left-hand side or bid price of 1.0500 (Canadian dollars) denotes the price that the currency dealer is willing to pay for a U.S. dollar, while the right-hand side or ask price denotes the price at which the dealer will sell a U.S. dollar. The difference between the bid and ask prices is referred to as the spread.


A corporate entity that wishes to exchange U.S. dollars for Canadian dollars in the above example would therefore sell the U.S. dollars at the dealer's bid price or the left-hand side price, while one that wishes to exchange Canadian dollars for U.S. dollars would buy the latter at the dealer's ask price or right-hand side price. Retail customers face much larger spreads than those shown in the above example.




RELATED TERMS
  1. Ask

    The price a seller is willing to accept for a security, also ...
  2. Two-Way Quote

    A type of quote that gives both the bid and the ask price of ...
  3. Best Bid

    The highest quoted bid for a particular trading instrument among ...
  4. Bid-Ask Spread

    The amount by which the ask price exceeds the bid. This is essentially ...
  5. Bid

    1. An offer made by an investor, a trader or a dealer to buy ...
  6. Currency Union

    When two or more groups (usually countries) share a common currency ...
Related Articles
  1. Forex Education

    The Greatest Currency Trades Ever Made

    These speculators took big positions - and scored huge profits - in the currency market.
  2. Forex Education

    Forex: Wading Into The Currency Market

    We go over the ground rules and available resources needed for this undertaking.
  3. Forex Education

    Forex Courses For Beginners

    Trading courses can provide a trader with all the tools required for a profitable experience.
  4. Forex Education

    Top 7 Questions About Currency Trading Answered

    Whether you're puzzled by pips or curious about carry trades, your queries are answered here.
  5. Forex Education

    Seasonal Trends In The Forex Market

    Uncover the predictable behaviors of some currencies throughout the calendar year.
  6. Forex Strategies

    Two Great Currencies To Profit From Oil Volatility

    U.S. dollar crosses with Canadian and Australian dollars offer easy access to crude oil trends due to their tight correlation with energy futures.
  7. Term

    Negotiating the Bid

    A bid is an offer investors make to buy a security.
  8. Forex Fundamentals

    Understanding the Floating Exchange Rate

    Floating exchange rate is the exchange rate between two currencies at any given time.
  9. Forex Education

    The Pros & Cons Of A Forex Trading Career

    Trading foreign currencies can be lucrative, but there are many risks. Investopedia explores the pros and cons of forex trading as a career choice.
  10. Active Trading Fundamentals

    Where And How Should You Make Your First Trade?

    New traders should enter markets that offer the greatest opportunity for learning their craft while keeping risk at a minimum.
RELATED FAQS
  1. How is the value of a pip determined?

    A pip in foreign exchange trading is a measure of a price movement in a currency pair. "Pip" is an acronym for price interest ... Read Full Answer >>
  2. Will technology ever disrupt the role of the custodian bank?

    Custodian banks, along with other financial institutions that hold custodian accounts, are likely to be disrupted but not ... Read Full Answer >>
  3. How do I close a long position in forex?

    Closing a long position in forex trading depends on whether you are using a broker operating under U.S. trading regulations. In ... Read Full Answer >>
  4. Where did the term 'pip' in currency exchange come from?

    The term pip is an acronym for percentage in point or price interest point. It measures a unit of change within a pair of ... Read Full Answer >>
  5. What is the difference between pips, points, and ticks?

    Point, tick and pip are terms used to describe price changes in the stock market and other markets. While traders and analysts ... Read Full Answer >>
  6. What are the nations with the lowest PPP (purchasing power parity) with respect to ...

    Purchasing power parity (PPP) is one of several economic indicators used to compare how much goods cost from country to country. ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Recession

    A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, ...
  2. Bubble Theory

    A school of thought that believes that the prices of assets can temporarily rise far above their true values and that these ...
  3. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  4. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  5. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  6. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!