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Two-way Quotes Meaning

Two-way quotes, also known as dual or two-sided quotes, provide both bid and ask prices for a financial instrument. In markets like foreign exchange or cryptocurrency trading, a two-way quote indicates the price at which a dealer is willing to buy (bid) a currency pair and the price at which they are willing to sell (ask or offer).

The difference between the bid and ask prices is the spread, which represents the dealer’s profit margin and reflects market liquidity and volatility. Two-way quotes are essential for transparent trading because they let market participants see both sides of the market simultaneously, enabling them to compare costs and make informed decisions.

In over-the-counter markets, dealers provide two-way quotes to clients to facilitate immediate execution, while in electronic order books, the highest bid and lowest ask from all participants form the top of the book.

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