What is spread?
Spread is the difference between the buying price (Buy or Ask) and the selling price (Sell or Bid) of a product. floating spread
- Spread is the difference between the buying price (Buy or Ask) and the selling price (Sell or Bid) of a product.
- Spread is one of the costs that is always present when trading.
- The less (smaller) the spread, the lower the transaction costs.
Price difference, also known as spread in the financial market, is the difference between the buying price (ask) of a product and the selling price (bid) of a product. When placing a trading order on the market, the spread fee is also the main cost of this order. The smaller the spread, the lower the transaction costs. The wider the spread, the higher the price. You can also think of the spread as the minimum distance the market must move in your favor before you can start making a profit.
For example, let's say the EURUSD market is quoted with a buy price of 1.0984 and a ask price of 1.0983, so the spread is calculated by subtracting 1.0983 from 1.0984 - for a total spread of 0 .0001 or 1 pip. Once you have placed an order on the EURUSD market and the market moves at least 1 pip in your favor, that is when your order starts generating profits. This is also the reason that as soon as you open an order, you will suffer a small loss
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