What are the different prices in our app?
In our app, we display three types of asset prices. These are:
- Mid-market price
- Buy Price
- Sell Price
Let’s break these prices down 👇.
This is the mid point between the lowest ask (sell price) and highest bid (buy price) on the order book. It reflects the average between the current buy and sell prices in the broader market, providing a benchmark for investors. This is the price you see when you navigate to a price screen of any crypto asset in the app.
This rate is set for when you want to purchase an asset. This is typically a bit higher than the mid-market rate. As you enter the buy flow in the app, you’ll be able to see the buy price. The buy price is also known as the bid price.
Conversely, when you're selling an asset, the sell price applies. It's typically a bit lower than the mid-market rate. When you start to sell an asset and go into the sell flow, you’ll be able to see the sell price. The sell price is also known as the ask price.
Why are we showing the mid-market rate on the price screen, instead of showing several prices on the same screen?
When it comes to the investing experience in the app, we aim to keep the user flow as clean, simple and straightforward as possible.
Having served customers for years, we’ve learned that often times less is more. Think a Tesla model 3 cockpit vs Boeing 747 cockpit - we’re very careful in trying to not overcomplicate the experience.
As investors grow into experts over many years of practice, their expectations grow and start to resemble more of the 747 cockpit. This includes seeing several prices at once, various indicators, etc. However, after having many interviews with our customers, we also see that there are pro traders who prefer a simple interface over a more complicated one and continue to use Change.
What is the spread?
In finance, the "spread" refers to the difference between two prices or rates. In the context of trading, it usually means the difference between the buy (ask) price and the sell (bid) price of an asset. The buy price is typically higher than the sell price, and the spread is this difference in value.
The size of the spread can be influenced by factors like market liquidity, volatility, and the asset's trading volume.
Asset’s trading volume and popularity
The more an asset is traded, the more liquid the market is for that asset. When it comes to more popular and liquid markets, such as Bitcoin and Ethereum, the spreads tend to be narrower. When it comes to smaller altcoins, the spreads can be wider as there are less people trading these coins, resulting in lower volumes and trickier price discovery.
Market volatility refers to the extent of price fluctuations in financial markets, indicating how much and how rapidly prices change over a given period.
Not all days in the trading world are created equal. The day-to-day differences in trading volumes can easily vary by several multiples. In addition to generic volatility differences, volatility also heavily depends on the specific coin - as a rule, the less popular the coin the more volatility there can potentially be.
The spread also plays a role in enabling the trading business in the first place. The spread helps protect brokerages by providing a buffer against unexpected market fluctuations, ensuring they can sustainably offer trading services and manage the risks associated with executing trades.