All terms
The gap between the best buy price and the best sell price.
The spread is an immediate cost. Buy at the ask and sell at the bid and you have already lost the spread before price moves at all.
Tight spreads indicate healthy competition between market makers. Wide spreads indicate that few people want to quote both sides, which is a liquidity warning.
A 0.01 percent spread on a major pair is normal. A 3 percent spread means you start every trade meaningfully behind.
That the spread is the whole cost of a trade. It is the visible part. Add the fee, the price impact of your size, and on a thin book the fact that the quote is for far less volume than you want to trade.
Common questions
What makes a spread wide?
Does the spread matter for long term holding?
Where this comes up on the site
The guides that actually use this word, rather than a list of everything we have written.
Where to go next
More trading terms
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