The difference between the bid (sell) and ask (buy) price of an asset.
The spread is the gap between the price you can sell at (bid) and the price you can buy at (ask). It represents the broker’s fee for executing your trade. A tighter spread means lower trading costs. Spreads vary by asset, broker, market conditions, and time of day. They tend to widen during low liquidity or high volatility.
Spread is a hidden cost that affects every trade. If the spread is 2 pips, your trade starts 2 pips in the red. For high-frequency or scalping strategies, spread can be the difference between profitability and loss. Always factor spread into your risk calculations.
EUR/USD has a bid of 1.1050 and an ask of 1.1052. The spread is 2 pips. If you buy at 1.1052, price needs to move at least 2 pips in your favor just to break even.
The spread is the gap between bid and ask price. A 2-pip spread means every trade starts 2 pips in the red.