Basics

Spread

The spread is the difference between the ask (buy) price and the bid (sell) price of an instrument. It is a trading cost: a position starts slightly negative because it opens at one price and would close at the other.

Also called: bid-ask spread, bid/ask spread

Hypothetical example

Hypothetically, EUR/USD is quoted 1.1000 / 1.1002, a spread of 2 pips. On 1 standard lot (100,000 euros), that is 20 US dollars, paid whether the trade later gains or loses.

Used in these guides

Basics8 min read
Pips, lots and spreads explained
How price moves are measured, how trade size turns pips into money, and what the spread costs you on every trade.
Costs & risk8 min read
Trading costs: spread, commission and swap
What you pay to open, hold and close a trade, how each cost is calculated and where NextTrade publishes its figures.
Basics8 min read
What is forex and how does it work?
How the global currency market works, how a forex trade is priced, and the risks that come with trading it.

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Risk Warning: CFDs are complex instruments and come with a high risk of losing money.

Spread

Hypothetical example

Related terms

Used in these guides

Pips, lots and spreads explained

Trading costs: spread, commission and swap

What is forex and how does it work?