Costs & Leverage
Spread
The difference between the bid and ask price. Lower spreads mean lower trading costs.
Also called: spreads
In practice
If EUR/USD shows a bid of 1.1050 and an ask of 1.1051, the spread is 1 pip. You open a long position and immediately sit 1 pip in the red — price must rise a full pip before you break even. The same pair during the NFP release might widen to 5–10 pips for a few seconds.
Why it matters for traders
The spread is a cost you pay on every single trade, win or lose, so it quietly dominates scalping and day-trading results where targets are small. Choosing a liquid pair and an active session keeps spreads tight; trading exotics or illiquid hours hands a large chunk of your edge to the broker before the move even begins.
Common pitfall
Traders compare accounts by advertised 'from 0.0 pip' spreads, which is the best-case price at the most liquid moment, not what you pay on every trade. The pitfall is ignoring average spread plus commission plus slippage and then being surprised when live costs eat a scalping edge. Pull real average spreads during the session you trade, add any commission, and judge the account on total cost per round turn — not on a marketing number.
Lessons that use this term
- How to choose a broker
Regulation, spreads, withdrawals — and the broker we recommend.
- Top 5 beginner-friendly forex pairs
The best forex pairs for beginners in 2026 — EUR/USD, USD/JPY, GBP/USD, AUD/USD and USD/CAD — with spreads, sessions and one practical tip each.
- Spread, commission and swap
The three ways a trade costs you money before it even moves.
Related tips
Related terms
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Spreads may fluctuate and widen due to factors including market volatility, news events, market open/close, and others. Processing times may vary depending on the chosen payment method.