Spread
Co-Founder•1 min read
The spread is the difference between the buy (bid) and sell (ask) price of a currency pair, security, or financial instrument. It represents the transaction cost or dealer’s margin for executing a trade.
In FX, a tighter (smaller) spread usually indicates a more liquid and competitive market, while wider spreads appear in volatile or less-traded currencies.
Example:
If GBP/EUR is quoted at 1.1710 / 1.1720, the spread is 0.0010, or 10 pips — the cost of immediately buying and selling the same currency.
Used in:
FX trading, securities dealing, and price comparison between brokers or market makers.