Basics
What is Spread?
By the verify.trading team · Last reviewed · How we write
Key points
- Buy at ask, sell at bid.
- Widens around news and low liquidity.
- Tight stops feel the spread most.
Spread explained
You open a long trade at the ask and it is valued at the bid, so a new position starts slightly negative by the size of the spread. Spreads widen when liquidity is thin, around major news and at the market open.
Some brokers add a commission on top of a narrower spread. Compare the total cost of a round trip, not the spread alone.
Example
If EUR/USD is quoted 1.0850 / 1.0851, the spread is 1 pip.
Related terms
Related tools and guides
General education, not investment advice. Regulatory limits and prop firm rules change; check the official source. verify.trading provides records and analysis, not investment advice; trading involves significant risk of loss. Absence of a regulatory action is not an endorsement, and absence from a regulator's list is not proof of authorisation.