What is Spread in Forex?

The spread is the difference between the bid price and the ask price of a currency pair.

For example, 

• Suppose the bid price is 1.1050 and the ask price is 1.1052.
• Now, the Spread would be 0.0002 (1.1052 – 1.1050), or 2 pips.

Note that spread is one of the main trading costs in forex. A trader buying at the ask price and selling at the bid price would face this difference (assuming prices do not change).

Spreads vary by currency pair, broker, liquidity, and market conditions.

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