Spread

Every quote has two prices: the bid, at which you can sell, and the ask, at which you can buy. The ask is always higher, and the gap between them is the spread. You pay it on every trade, because you buy at the higher price and sell at the lower one.

Example

Illustrative quote: EUR/USD bid 1.08520, ask 1.08530. The spread is 0.00010, or 1 pip. On a standard lot (100,000 euros), where 1 pip is worth 10 dollars, the cost of crossing that spread is 10 dollars. On a mini lot it is 1 dollar.

If you buy at 1.08530 and the price does not move at all, closing immediately at the bid of 1.08520 shows a 10-dollar loss. Price needs to move 1 pip in your favour just to break even.

Fixed, variable and raw spreads

• Variable spreads move with market conditions, usually tight in busy hours and wider at the rollover, around news and at weekends.
• Fixed spreads stay the same in normal conditions but are usually wider on average, and may still change in extreme markets.
• Raw spreads on ECN-style accounts can be close to zero, with a separate commission.

Common misconceptions

• "Spreads from 0.0 pips" is a minimum, not what you will usually pay. Compare typical or average spreads, ideally at the hours you trade.
• A low spread does not mean a cheap account if a commission or other fees are added. The useful figure is the all-in cost.

The pip value calculator turns a spread in pips into money. See spreads and commissions, why spreads widen and how to compare trading costs.