Crypto Investing: How Bid and Ask Prices Affect Your Purchase
Crypto investing involves understanding the price you can actually trade at, rather than relying only on a number displayed on a chart.
When you review a cryptocurrency, you may see a bid price, an ask price and a recent trading price. These figures describe different things, and the price available for your purchase may differ from the headline price.
Understanding bid and ask prices helps you assess the quoted cost, compare transaction previews and recognise why the amount received can differ from an initial estimate.
For people using or considering OptimCoins Australia, the starting point is to confirm how the provider determines its quotes, what charges apply and whether the displayed price is indicative or available for execution.
What Are Bid and Ask Prices?
In an order-book market, bids represent offers to buy an asset, while asks represent offers to sell it.
The best bid is the highest available buying price. The best ask is the lowest available selling price. Each price is associated with a quantity, so the best price may cover only part of a proposed transaction. Coinbase
Key Terms to Understand
- Bid price: A price a buyer is offering to pay.
- Ask price: A price a seller is offering to accept.
- Best bid: The highest current bid in the relevant order book.
- Best ask: The lowest current ask in the relevant order book.
- Bid–ask spread: The difference between the best ask and best bid.
- Last traded price: The price at which the most recent trade occurred.
- Available quantity: The amount offered at a particular price.
These definitions describe an order-book market. A broker or instant-purchase service may instead present its own transaction quote.
1. Understand Which Price Applies When You Buy
When a purchase executes immediately against existing sell orders, it generally starts at the lowest available ask.
The bid price represents buying interest from other participants. It is not automatically a price at which you can purchase immediately.
Hypothetical Example
Price information | Amount per unit |
Best bid | A$99 |
Best ask | A$101 |
Last traded price | A$100 |
In this example, an immediate purchase may begin at A$101 per unit, provided sufficient quantity remains available at that price.
Seeing A$100 on a chart does not establish that the asset can currently be bought for A$100.
2. Calculate the Bid–Ask Spread
The spread shows the gap between the best available buying and selling prices.
Basic Calculation
Bid–ask spread = Best ask − Best bid
Using the previous example:
- Best ask: A$101.
- Best bid: A$99.
- Spread: A$2 per unit.
A percentage spread can also help compare differently priced assets, but the calculation basis should be stated.
Spread as a Percentage of the Midpoint
Midpoint = (Best ask + Best bid) ÷ 2
Percentage spread = Spread ÷ Midpoint × 100
For this example:
- Midpoint: A$100.
- Spread: A$2.
- Percentage spread: 2%.
Other services may use a different denominator. Check the method before comparing percentage figures.
3. Recognise Why a Purchase Can Initially Show a Lower Sale Value
Buying and immediately selling can involve different prices even when the quoted market remains unchanged.
If you buy at the ask and sell at the bid, the difference affects the amount recovered.
Hypothetical Example
- Purchase quantity: 10 units.
- Purchase price: A$101 per unit.
- Purchase amount before fees: A$1,010.
- Immediate available selling price: A$99 per unit.
- Sale proceeds before fees: A$990.
- Difference: A$20.
This example assumes sufficient liquidity, unchanged quotes and no separate charges.
The difference reflects the spread crossed by the two transactions. It does not require a fall in the quoted bid and ask prices.
A portfolio dashboard may use another valuation method, so check what its displayed value represents.
4. Distinguish the Spread From a Trading Fee
The bid–ask spread and a separately charged trading fee are different concepts.
In an order-book market, the spread is the gap between available buy and sell prices. A provider may also charge a transaction fee.
A quoted-price service may use the word “spread” to describe a margin incorporated into its quote. That margin is not necessarily identical to an exchange’s order-book spread.
Costs to Check
- Execution price.
- Separately disclosed trading fee.
- Any margin included in the quote.
- Currency conversion charges.
- Payment-method charges.
- Minimum transaction charges.
- Withdrawal or network charges, where applicable.
Not every cost applies to every purchase.
If the actual execution price already reflects a spread or price movement, do not add that same effect again as a separate expense when calculating the amount paid.
5. Review How Much Crypto Your Budget Will Buy
For a fixed cash budget, the execution price and treatment of fees affect the quantity received.
Simplified Calculation
Quantity received = Amount available for purchase ÷ Execution price
Suppose a person has a total budget of A$1,000 and a hypothetical A$10 fee is deducted from that budget.
- Total budget: A$1,000.
- Fee deducted: A$10.
- Amount available for purchase: A$990.
- Execution price: A$100 per unit.
- Quantity received: 9.9 units.
If the execution price were A$101, the same A$990 would purchase approximately 9.802 units.
This example assumes one execution price and no other charges. Actual transactions may involve rounding, multiple fills or fees deducted in the crypto asset.
6. Understand Available Quantity and Market Depth
The best ask does not necessarily apply to the entire purchase.
An order book can contain different quantities at several selling prices. A purchase larger than the quantity available at the lowest ask may execute across additional price levels.
Hypothetical Order Book
Ask price per unit | Quantity available |
A$100 | 3 units |
A$101 | 4 units |
A$102 | 10 units |
If an immediate purchase of 10 units executes against these unchanged offers:
- 3 units cost A$300.
- 4 units cost A$404.
- 3 units cost A$306.
- Total cost before fees is A$1,010.
- Average execution price is A$101.
Although the best ask started at A$100, the full purchase did not execute at that price.
Market orders can fill at multiple prices depending on the quantities available when they reach the market. coinbase.com
7. Distinguish Slippage From the Spread
The spread describes the gap between the best bid and best ask at a particular moment.
Slippage describes a difference between an expected execution price and the actual execution price. It can arise because prices change or because available liquidity is insufficient at the expected price.
Situations That Can Affect Execution
- Rapid price changes.
- Limited quantity at the best ask.
- A large order relative to market depth.
- Other orders executing first.
- Changes between preview and submission.
- Platform-specific execution arrangements.
Slippage can produce a more or less favourable result than expected. Coinbase’s explanation identifies liquidity and market activity as relevant factors. Coinbase Help
A narrow spread alone does not guarantee that a large purchase will execute close to the initial quote.
8. Compare Market and Limit Orders
Where supported, order types provide different ways to approach execution.
Market Order
A market order seeks execution against available market prices.
It prioritises execution over a specified price limit, subject to the platform’s rules and protections. The final price may differ from the preview, and some platforms can stop or partially execute orders under particular conditions.
Limit Order
A buy limit order sets the maximum execution price per unit.
It may execute at the limit price or lower, but there is no guarantee that the full quantity—or any quantity—will be filled.
Important Distinctions
- A limit price does not guarantee execution.
- A displayed market price touching the limit does not guarantee a fill.
- Other orders may have priority.
- Partial fills may occur.
- Separately charged fees can increase the total cost.
- A limit order priced to match available sellers can execute immediately.
Confirm which order types are supported by the service you use. Do not assume that OptimCoins offers a particular order type without checking its current terms.
9. Check What the Displayed Price Represents
A website or app may display a price that serves as a reference rather than an executable offer.
The Displayed Figure Could Be
- The most recent trade.
- The midpoint between bid and ask.
- An indicative market reference.
- A price sourced from another venue.
- A provider’s purchase quote.
- A valuation used for account reporting.
Questions to Ask
- Is this a reference price or a purchase quote?
- Which currency or trading pair does it use?
- When was it updated?
- Does it apply to my transaction size?
- Are fees included?
- Can it change before execution?
Understanding the label helps explain why a chart, purchase preview and transaction confirmation may show different figures.
10. Compare Quotes on a Consistent Basis
A lower advertised fee does not necessarily mean a lower total purchase cost.
Compare the amount paid with the net quantity received, using the same asset, currency, payment method and transaction size.
Hypothetical Comparison
Item | Quote A | Quote B |
Total cash paid | A$1,000 | A$1,000 |
Net crypto received | 10 units | 9.9 units |
Effective cost per unit | A$100 | Approximately A$101.01 |
Effective purchase cost per unit = Total cash paid ÷ Net units received
This calculation helps compare completed purchases or equivalent quotes. It does not assess custody quality, withdrawal access, security or investment suitability.
Quotes taken at different times may also reflect market movement rather than a difference in provider pricing.
11. Read the Transaction Preview Carefully
Before confirming a purchase, check the information presented for that specific transaction.
Details to Review
- Asset name and ticker.
- Trading pair or payment currency.
- Cash amount committed.
- Estimated or confirmed quantity.
- Quoted price.
- Separate fees.
- Whether fees are included or added.
- Quote expiry, where applicable.
- Order type.
- Execution conditions.
- Any limits or minimum amounts.
A preview may be an estimate rather than a locked quote. Check the provider’s explanation of when a price becomes binding and what happens if the quote expires.
12. Review the Completed Purchase Record
After execution, compare the confirmation with the transaction you intended to place.
Records to Retain
- Transaction date and time.
- Asset and trading pair.
- Order type.
- Total amount paid.
- Quantity purchased.
- Net quantity credited.
- Average execution price.
- Individual fills, where available.
- Fees and the currency used to pay them.
- Order or transaction reference.
- Any unfilled or cancelled amount.
If the result differs from the preview, check whether multiple fills, fees, rounding or price changes explain the difference.
Ask the provider about unexplained discrepancies rather than relying only on the account’s displayed balance.
A Practical Crypto Purchase Price Checklist
Review area | What to establish |
Asset | Correct cryptocurrency and trading pair |
Displayed price | Reference price, last trade, midpoint or quote |
Bid and ask | Current buying and selling prices, where shown |
Spread | Difference and percentage calculation basis |
Quantity | Availability at the quoted price |
Order size | Possible effect of market depth |
Order type | Execution approach and price controls |
Fees | Separate charges and how they are deducted |
Quote conditions | Expiry and whether the price can change |
Total cost | Cash paid relative to net units received |
Confirmation | Actual price, fills, fees and quantity |
Records | Transaction details retained for later review |
<h2>Questions OptimCoins Users Should Ask</h2>
People using or considering OptimCoins Australia should confirm how its current pricing and execution arrangements work.
Useful Questions Include
- How is the purchase quote determined?
- Does the displayed price include a margin?
- Are any transaction fees charged separately?
- Is the quote indicative or fixed for a stated period?
- Does transaction size affect the quote?
- Which order types are available?
- Can a transaction be partially executed?
- How are price changes handled before confirmation?
- How is the final quantity calculated?
- What transaction records are available?
- What withdrawal charges or restrictions apply?
Check the current service terms rather than assuming that another platform’s pricing model applies.
Common Mistakes Users Should Avoid
Common errors include:
- Assuming the chart price is the available purchase price.
- Confusing the bid with the ask.
- Comparing prices in different currencies.
- Ignoring the quantity available at the best ask.
- Treating the spread as identical to a separately charged fee.
- Assuming a limit order guarantees execution.
- Comparing provider quotes taken at different times.
- Overlooking fees deducted from the purchased asset.
- Counting spread or slippage twice in cost calculations.
- Treating a narrow spread as evidence that an asset is low risk.
Understanding execution costs improves price awareness, but it does not establish whether a crypto asset is a suitable investment.
Looking Beyond the Headline Price in Crypto Investing
Crypto investing requires attention to the price and quantity available for the actual transaction.
The ask price, available liquidity, order type and applicable fees can all affect a purchase. The bid price also helps explain why an immediate sale value may be lower than the amount just paid.
Review the transaction preview, understand the provider’s quote conditions and retain the completed purchase record.
For people using or considering OptimCoins Australia, asking how prices and charges are determined can help clarify the total cost before confirming a transaction.
This article provides general educational information and does not constitute personal financial advice. Crypto assets can be highly volatile, and investors may lose some or all of their money.