Spread

Spread

To come to the definition of the spread, let’s start with bid and ask prices.

You definitely met these terms when exchanging money in the bank. Have you noticed that one price is higher and the second is lower? The lower price is at which the bank buys the currency from you and the higher one is at which it sells the currency to you. The difference between these two prices is called spread. Spread is revenue that a bank gets from the foreign exchange operations it performs for a client.

FX spread works similarly. To enter the forex, you need a broker who will carry out your operations. Will it do it for free? Of course, not. The commission you will pay a broker is called spread.

How to count forex spread. There are two prices on the chart: bid (lower) and ask (higher). Read more about them in our article. The difference between them is called spread. To calculate the spread faster, check the FBS calculator.

When trading with FBS, you can apply to different types of spread: floating, fixed, and no-spread. The type depends on the trading account you choose.

The fixed spread is the best option for traders because they always know how much they will pay for a trade.

The floating spread is the spread that changes all time depending on the market conditions and supply-demand issue.

No-spread or 0 pip spread is an option to trade without the spread. Instead, you will pay a commission.

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2022-07-27 • Updated

Frequently asked questions

  • What is a spread in stock trading?

    A spread for a stock is the difference between the highest price that a buyer is willing to pay (the bid) and the lowest price that a seller is willing to accept (the ask). For example, the bid/ask rate for Tesla stock is $673,30/$673,58. You will buy the stock at the higher ask price of $673,58 and sell it at the lower bid price of $673,30. This represents a spread of 0,28 points. FBS provides competitive spreads on the stock market.

  • How does spread work in crypto?

    The spread is the difference between the bid price and the ask price. A bid is a buy order, where you sell the base currency, and an ask is a sell order, where you buy the base currency. Base currency is the first currency in the pair.

    The spread is one of the key costs in trading, including cryptocurrency trading. FBS broker offers competitive crypto spreads and fast order execution for convenient crypto trading. So if you are looking for a cryptocurrency broker, consider trying FBS.

  • What are the exotic pairs with the best spread at FBS?

    The spread is the difference between the bid price and the ask price. A bid is a buy order, where you sell the base currency, and an ask is a sell order, where you buy the base currency. Base currency is the first currency in the pair.

    FBS broker offers competitive spreads for exotic Forex. To make sure, you can check USDZAR, USDMXN, and USDTRY and have a look at the spreads. You can choose your exotic Forex pairs and start trading with FBS.

  • What determines a spread in Forex trading?

    A spread can be narrower or wider depending on a currency pair, Forex trading hours, and market conditions. At FBS, you can choose trading instruments with spreads most suitable for your needs: a floating spread from 0.5 points, fixed spread from 3 points, and zero spread.

  • What causes a high spread in Forex?

    Spreads usually widen with the increase in volatility or low liquidity caused by out-of-hours trading. FBS offers a competitive spread list with a floating spread from 0.5 points, fixed spread from 3 points, and zero spread. Start trading Forex on favorable terms now.

  • How to reduce a spread in Forex trading?

    A spread usually indicates a level of volatility. The more volatile the Forex market, the wider the spread gets, especially when a news release affects currencies. However, the most promising trades happen during higher volatility.

    At FBS, you can open trading accounts with a floating spread, fixed spread, and zero spread. Choose a currency pair most appropriate for your trading strategy and make the most of volatility.

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