What are spreads in Forex trading?

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Nov 24, 2024
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A spread is the difference between a currency pair’s bid (selling) price and ask (buying) price. For example, if EUR/USD has a bid price of 1.1000 and an ask price of 1.1002, the spread is 2 pips.

Spreads are essentially the cost of trading and vary depending on the broker and market conditions. Tight spreads are preferable, especially for day traders and scalpers who make frequent trades.