Spread
The spread is the difference between the bid price (the price buyers pay) and the ask price (the price sellers receive). It is the primary transaction cost in forex and CFD trading.
Every market quote has two prices: the bid (what the market will buy from you) and the ask (what the market will sell to you). The spread is the gap between these two numbers, and it represents the broker's cost of making a trade available to you.
Spreads are measured in pips for forex pairs. A EUR/USD spread of 0.2 pips is considered tight; a spread of 2.0 pips is wide. Tight spreads lower your cost per trade, which matters most for short-term or high-frequency strategies.
Spreads widen during low-liquidity periods — such as the hours between the close of the New York session and the open of Sydney — and during major news events like central bank decisions or economic data releases.
There are two main pricing models: fixed spreads remain constant regardless of market conditions (useful for planning costs) and variable spreads fluctuate with liquidity (typically tighter in normal conditions, wider during volatility).
TrustFinance compares spreads across regulated brokers across the most-traded pairs, helping traders identify the most cost-effective execution for their strategy.
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