What is Spread?

A spread is simply the price difference between where the trader may purchase or sell an underlying CFD asset, this is commonly referred to as the bid and ask price. You can think of the spread as the trading cost for placing a position; thinner spreads essentially enable you to reduce your trading costs thus making profits larger or losses smaller, after you close your positions.

For example, if the BID price is 1.2634 and ASK price is 1.2636, the Spread is the difference between the two: 2 pips.

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