In plain English
What Bid price means
If EUR/USD is quoted at 1.0850/1.0852, the 1.0850 side is the bid. That is the price you get if you sell EUR/USD. In active FX markets, bid prices change as liquidity, volatility, and order flow change.
Why it matters
The bid price determines your exit value when you sell. Comparing bid quotes matters because a higher bid gives you a better sale price. It is also the key reference for measuring the spread between buying and selling a currency pair.
Example
Simplified example: if GBP/USD is 1.2700/1.2703, the bid is 1.2700. Selling 10,000 GBP at that quote returns 12,700 USD before commission. If the quote later becomes 1.2696/1.2699, the new bid is 1.2696.
Quick answers
Common questions
Is the bid always lower than the ask?+
Yes. In a normal two-way quote, the bid is the buy price and the ask is the sell price, so the bid is usually lower.
Can the bid be the execution price on a short sale?+
Yes. When you sell the base currency, the bid is the relevant side of the quote.
Sources