What Is Mid-Price
Mid-price is the price halfway between the bid price and the ask price of a product. It is calculated by adding the bid and ask together and dividing by two.
For example, if the bid on a currency pair is 1.2700 and the ask is 1.2704, the mid-price would be 1.2702.
Where Mid-Price Is Commonly Used
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Charting — some price charts plot the mid-price rather than the bid or ask alone, to give a smoothed reference point.
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Valuation snapshots — used to estimate the approximate market value of a position at a given moment.
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Comparing spreads — looking at how far the bid and ask sit from the mid-price helps illustrate the size of the spread.
Why It Is Not Always the Tradeable Price
As a reminder, the mid-price is a reference point, not necessarily a price you can trade at directly. Actual buy and sell execution typically occurs at the prevailing ask and bid respectively, with the spread accounting for the difference.
A Practical Example
Two brokers quoting the same instrument might show different bid and ask prices, yet still share a very similar mid-price, since both are referencing the same underlying market. Comparing how far each broker’s bid and ask sit from that shared mid-price is one way traders informally assess how competitive a broker’s spread is.
A Useful Reference Point, Not the Full Picture
Mid-price offers a simple way to gauge an instrument’s general value briefly, but traders should still pay attention to actual bid and ask prices, and the spread between them, when assessing the real cost of entering or existing a trade.
Risk Warning:Trading CFDs involves significant risk and may not be suitable for all investors. Losses can exceed your initial deposit. Please ensure you fully understand the risks involved before trading.
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