What is a 'Buy Quote'

A buy quote is one way of describing the best available price to buy a particular security at any given time throughout a trading session.

BREAKING DOWN 'Buy Quote'

The buy quote is, simply put, the number that represents the price of the security. Brokers are required to provide customers these best available prices, also known as National Best Bid and Offer (NBBO).

NBBO refers to both the lowest bid price, what a buyer is willing to pay for a given security, and the best available ask price, what the seller would be willing to accept for a security. Securities and Exchange Commission rules require brokers to guarantee those prices. It's the best ask price, or offer, that is most similar to the idea of a buy quote.

The idea of the NBBO is to make sure all investors get the best price possible when trading via broker, eliminating the need to compile different quotes from multiple exchanges to ensure a trade is optimal.

Buy quote, in forex specifically, is displayed on the right side of the price quote and represents the price at which customers can purchase the base currency. For example, in the GBP/USD forex currency pair, a quote of 1.6253/55, a customer could buy the base currency (GBP) for $1.6255.

A currency pair represents two different currencies, with the value of one being quoted against the other: The first listed currency of a currency pair is called the base currency, and the second currency is called the quote currency.

How Buy Quote Factors Into the Spread

The opposite of a buy quote, of course, is a sell quote. And the difference between those two numbers, which may sometimes be referred to as the offer price and bid price, is the spread. For example, if a EUR/USD quotes read 1.4100/02, the spread is the difference between 1.4100 and 1.4102. For the trade to break even, the position much move in the direction of the trade in the same amount as the spread.

On the Forex, currency trades typically involve large amounts of money. Though spreads may be small, during large trades, small spreads can add up quickly.

RELATED TERMS
  1. National Best Bid and Offer (NBBO)

    The National Best Bid and Offer (NBBO) is an SEC regulation requiring ...
  2. Price Improvement

    Price improvement involves attaining a higher bid price, if selling ...
  3. Currency Pair

    A currency pair is the quotation of one currency against the ...
  4. Base Currency

    The first currency quoted in a currency pair on forex. It is ...
  5. Stock Quote

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  6. Ask

    The ask is the price a seller is willing to accept for a security. ...
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