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What is spread?

All currency transactions involve a bid/ask spread.

Spread is the difference between the bid and ask prices.

When trading any financial instrument, you are offered two prices; the bid price and ask price. The bid price is the selling price and the ask price refers to the price offered for buying.

The difference between the bid and ask is called spread and varies for each financial instrument traded.

The measurement between the two prices is usually referred to as:

 

  • Pips - for forex currency pairs
  • cents - for spot precious metals
  • ticks - for future (OTC): Currencies, precious metals, commodities and CFDs USA
  • points - for Future (OTC): Indices, Energies, CFD Indices and CFD Energies

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