Are your "mid-market" currency rates buy rates or sell rates?

The mid-market rates shown in our information services are neither
"buy" rates nor "sell" rates. Mid-market rates are derived from
mid-point between the buy and sell rates of large-value transactions in
the global currency markets.

Since "buy rates" and "sell rates" include overheads and profit margins
that are set independently by each foreign exchange provider, they will
vary depending on who you're talking to, and will always be different
than the mid-market rate.

For the guaranteed best buy and sell rates on your foreign exchange,
sign up free for XE.com's [1]XEtrade Discount On-Line Foreign Exchange
Service.

An Example to Illustrate the Difference Between Buy Rates, Sell Rates,
and Mid-Market Rates

Like any non-centralized, widely distributed market, the currency
market has different prices when you're buying and when you're selling.
As an example of how this market operatives, let's consider a similar
and familiar market: antiques.

Let's say you find an antique lamp in your house. You look up the value
of the lamp on the Internet and find that on average, the market value
of your lamp is $200.

So you take the lamp to the antiques dealer and they offer $180 for
your lamp. Yes, it may be technically worth $200, but the dealer has to
buy it for a little less than market value in order to stay in
business. So they buy the lamp from you for $180.

So next you go home, only to find out that the lamp was an important
heirloom that should not have been sold. So you head back to the market
to buy back the lamp. Luckily, they haven't sold it. You see the lamp
in the store window, but now the price tag says $220! The dealer has
marked the lamp up from market value in order to stay in business. So
they sell the lamp back to you for $220.

In this example, the antique dealer's buy rate was $180, and their sell
rate was $220. The average of the buy rate and the sell rate is the
market rate, which was $200. However, it is important to note that no
trade actually occurred for this amount. With the lamp, as with
currency, nobody trades at the mid market rate. Anyone who did would
lose money.

Of course, different dealers might have charged different amounts. One
might have offered to buy the lamp for $150, another for $190. But in
no case can dealers buy at more than the market rate, or sell at less
than the market rate, without going out of business in the long run.

The exact same thing is true when dealing with currencies. All
currencies have a market rate, and different dealers will set different
buy and sell rates depending on the money they want to make. When
converting from one currency to another, you are always buying one
currency and selling another, so you will always get the buy rate from
one currency and the sell rate from the other.

The further the buy and sell rates are from the market rate, the more
the transaction costs you. Some dealers are very far from the market
rate, whereas we at XEtrade strive to save you money by making our
rates as close as possible.

In summary, buy and sell rates are prices set by currency dealers to
stay in business.

When doing a conversion, our free currency information services always
list the mid-market rate, since we can not know if you will be buying
or selling a given currency. The mid-market rate is the most generally
useful number, since it serves as a reliable, indicative value for the
currency that is not weighted towards buying or selling.

And for your ease of use, our [2]XEtrade service does not specifically
reference buy and sell rates. We simply collect the information about
your desired trade and quote you a price. This is specifically to avoid
needless confusion.