📊 What is a Spread?

The spread is the difference between the Bid (sell) price and the Ask (buy) price.

It represents the cost of entering a trade.

📐 Spread Formula

Spread = Ask Price – Bid Price

🔎 Example

If EUR/USD is quoted as:

1.1000 / 1.1002

• 1.1000 → Bid (Sell)

• 1.1002 → Ask (Buy)

Spread = 0.0002 (2 pips)

This 2-pip difference is the transaction cost for opening the position.

📌 Important Notes

• Spreads may be fixed or variable, depending on account type and market conditions.

• Spreads may widen during periods of high volatility or low liquidity.

  
  

⚠️ This content is provided for informational purposes only and does not constitute investment advice. Trading involves risk.