Base asset & Quote asset

The base asset, also known as the left-side asset, is the asset that holds prominence in financial markets when considering a currency pair or trading symbol. On the other hand, the quote asset, or the right-side asset, refers to the counterpart of the base asset.

Let’s examine a few examples:

For the currency pair EUR/USD, the Euro (EUR) serves as the base asset, while the US Dollar (USD) functions as the quote asset. Consequently, one would say “EUR is the base asset” and “USD is the quote asset.”

In the case of the stock symbol AAPL, Apple Inc. represents the underlying company and takes on the role of the base asset. The quote asset, in this particular scenario, corresponds to the currency employed for trading the stock (e.g., USD on the NASDAQ exchange).

To clarify further, the base asset pertains to the asset that is bought or sold, while the quote asset is instrumental in determining its value.