Geldkurs

Geldkurs is a term used in German-speaking financial markets to denote the bid price for an asset, i.e., the price at which market participants are willing to buy that asset. It is commonly applied to foreign exchange quotes and to securities trading.

In practice, market quotes are often presented as Geldkurs/Briefkurs. The Geldkurs represents the price at which a bank or market maker is prepared to buy the asset from a client, while the Briefkurs is the price at which it is willing to sell the asset to a client. The difference between the two prices is the bid-ask spread, which serves as a transaction cost and a measure of market liquidity.

Applications of the Geldkurs include foreign exchange trading and securities trading. In foreign exchange, the Geldkurs indicates how much domestic currency the market will pay per unit of a foreign currency. In securities markets, it reflects the price the market is willing to pay for shares or other instruments. The concept helps determine the actual execution price for trades, since a buy order typically executes at the Briefkurs and a sell order at the Geldkurs.

Factors influencing the Geldkurs and its spread include liquidity, volatility, time of day, trading volume, and overall market conditions. In highly liquid markets, the geldkurs tends to be close to the briefkurs, resulting in a narrow spread; in illiquid markets, the spread can widen significantly.

The term Geldkurs originates from German banking and exchange practices and is widely used in Germany, Austria, and Switzerland. In English-language contexts, it is commonly referred to as the bid price.