JoymistaWhat Is the Spread in Trading?
The spread is the gap between the buy price (ask) and the sell price (bid), a cost you pay on every trade you open.
Explained
A buy opens at the ask and closes at the bid, so every trade starts with a small loss equal to the spread. Spreads are usually tight in busy hours and widen around major news, at the market open and on thinly traded instruments.
Example
Example with made-up numbersThe bid is 1.10000 and the ask 1.10015, so the spread is 1.5 pips, costing 1.5 × 10 = 15 dollars on one standard lot.
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Open in JoymistaEducational content, not investment advice.