DEFINITION of 'Right Hand Side - RHS'

The ask or offer price of a foreign exchange rate. A quote for foreign exchange appears as two prices (known as the bid/ask spread); for example, 1.2591 - 1.3592. The right hand side, in this case 1.3592, represents the available offer price for the base currency or the bid rate for the quoted currency.

BREAKING DOWN 'Right Hand Side - RHS'

The right hand side (RHS) is, literally, the right-hand side of the foreign exchange price quote. This is the price that the market is willing to sell a currency pair and the price that traders buy in. The size of the bid/ask spread is an indicator of the current liquidity in a market. A tight spread means there is good liquidity and helps cut down on losses. Forex brokers typically make money off of the bid/ask spread; the difference between the bid and the ask price is the profit on the transaction.

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RELATED FAQS
  1. What's the difference between bid-ask spread and bid-ask bounce?

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    Stock exchanges are set up to assist brokers and other specialists in coordinating bid and ask prices. The bid price is the ... Read Answer >>
  3. How do I use the bid-ask spread to evaluate whether I should buy a particular stock?

    Understand the significance of the bid-ask spread for investors in making a decision on whether or not to purchase a particular ... Read Answer >>
  4. What types of stocks have a small difference between bid and ask prices?

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  5. What does the variance between the bid and ask price of a stock mean?

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