Left-Hand Side

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. Bid-Ask Spread

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

    1. An offer made by an investor, a trader or a dealer to buy ...
  4. Best Bid

    The highest quoted bid for a particular trading instrument among ...
  5. Two-Way Quote

    A type of quote that gives both the bid and the ask price of ...
  6. Currency Union

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

    The Greatest Currency Trades Ever Made

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

    Forex: Wading Into The Currency Market

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

    Forex Courses For Beginners

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

    Seasonal Trends In The Forex Market

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

    How To Calculate An Exchange Rate

    An exchange rate is how much it costs to exchange one currency for another.
  7. Forex Education

    Four Currencies Under the Spotlight in 2016

    With currencies having become the “tail that wags the dog,” in terms of their impact on the global economy, these four currencies will be under the spotlight in 2016.
  8. Forex Education

    Who are Japanese Housewives?

    The term “Japanese housewives” refers to the thousands of Japanese women who traded in the currency markets in the first decade of the new millennium.
  9. Forex Fundamentals

    Steps To Open An Offshore Forex Account

    Offshore forex accounts offer favorable tax treatment and less restrictive regulations. Here’s how a U.S.-based investor can open one.
  10. Forex

    How Currency Forward Contracts Work

    A currency forward contract locks the exchange rate for a currency’s purchase or sale at a future date.
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 >>
Hot Definitions
  1. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  2. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  3. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  4. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  5. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
Trading Center