Ⅳ Reading FT Dollar Spot Rates

A. Closing mid-point

is calculated by taking average of Bid andOffer rates that is summing up Bid and Offer rates and dividing by 2.

B. Bid / Offer spread

Bid rate is the rate atwhich banks buy the currency.

Offer rate is the rate at which they sell.

Spread is thedifference between the buying and selling price of a currency.

C. Bid – ask Spread and Bid – ask Margin

Bid-ask spread is the difference between thebid and ask price. It is usually expressed by “point”.

one basis point = 1% of 1% = 0.0001

When the spread is expressed as a percent ofthe  ask price, it is called bid – askmargin.

Bid – ask margin = (ask – bid)/ask x 100

D. Basic Rate and Cross Rate (交叉汇率/套算汇率)

Basic rate: the price of domestic currency to key currency.

Cross rate: By knowing any two exchange rates, we will be able to infer a thirdexchange rate.A cross rate is the rate which is calculated from two otherbilateral exchange rate.

S(x/y) = S(x/z) / S(y/z)

The following formula is available when boththe bid and ask prices are calculated:

Sb(x/y) = Sb(x/z) / Sa(y/z)

Sa(x/y) = Sa(x/z) / Sb(y/z)

Sb(x/y) = Sb(x/z) × Sb(z/y)

Sa(x/y) = Sa(x/z) × Sa(z/y)

E. Nominal and Real Exchange Rates

Nominal exchange rate (名义汇率): the exchange rate that prevails at a givendate.

Real exchange rate(实际汇率): is nominal exchange rate adjusted forrelative prices between the countries under consideration.

Real exchange rate is the nominal exchangerate adjusted for relative changes in domestic and foreign price levels. Thatis, adjusted for inflation differential. So the real exchange rate captureschanges in the purchasing power of a currency relative to othercurrencies. 

SR = Sd/f x (Pf/Pd)

F. Fixed Exchange Rate (固定汇率)and FloatingExchange Rate(浮动汇率)

Official Rate(官方汇率) and Market Rate (市场汇率)

Single Rate(单一汇率) and Multiple Rate (多重汇率)

Exchange rate in retail market(零售市场) and inwholesale market(批发市场)

Bid And Asked

来源：https://www.investopedia.com/terms/b/bid-and-ask.asp