What is the "Spread"?
What is the "Spread"?
The spread is the difference between the price that you can sell currency at (BID) and the price you can buy currency at (ASK). This spread is revealed when you compare the bid and the ask price. For example EUR/USD is quoted at a bid price of 1.2553 and an ask price of 1.2556. The difference is USD 0.0003, which is equal to 3 pips.
When trading Forex, you are quoted a dealing spread offering you a buying (ASK) and a selling (BID) level for your trade. Once you accept the offered price and receive confirmation from your broker, the trade is done. There is no need to call an exchange floor. There are no other delays. This is possible due to live streaming prices, which are also a great advantage in times of fast moving markets. You can see where the market is trading and you know whether your orders are filled or not.
The spread is the difference between the price that you can sell currency at (BID) and the price you can buy currency at (ASK). This spread is revealed when you compare the bid and the ask price. For example EUR/USD is quoted at a bid price of 1.2553 and an ask price of 1.2556. The difference is USD 0.0003, which is equal to 3 pips.
When trading Forex, you are quoted a dealing spread offering you a buying (ASK) and a selling (BID) level for your trade. Once you accept the offered price and receive confirmation from your broker, the trade is done. There is no need to call an exchange floor. There are no other delays. This is possible due to live streaming prices, which are also a great advantage in times of fast moving markets. You can see where the market is trading and you know whether your orders are filled or not.
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