Foreign exchange rates are quoted in several different manners using standardized nomenclature to expedite communications and reduce misunderstandings. Exchange rates quoted on the Interbank market are akin to wholesale prices, and are available only to institutional investors that deal in large volumes of currency. Exchange rates quoted to individual investors are akin to retail prices, due to the fact that individual transaction amounts generally tend to be smaller, and the rates often include the broker’s commission, often expressed in terms of pips, ticks or basis points.
There are always two prices involved in foreign currency transactions: one at which sellers want to sell; and one at which buyers want to buy.
