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What Is the Spread? Cost, Pips and Examples | Borearis
The spread is the gap between the bid and the ask, and it is the first cost of every trade.
How it is measured
On EUR/USD a spread of 0.0002 is two tenths of a pip, or 20 dollars per standard lot: 0.0002 × 100,000. On gold it is usually quoted in dollars, such as 0.30.
Why it matters
A strategy with a small edge can lose money purely from the spread. A scalper taking twenty trades a day pays it twenty times.
When it widens
- At the daily open and around news releases.
- In thin liquidity, such as late Friday.
- On volatile instruments and exotic pairs.
Use the spread cost calculator to see the monthly number before you judge a strategy.
How is the spread calculated?
Ask minus bid, usually quoted in pips or price units.
Is a lower spread always better?
Lower cost helps, but execution quality and slippage matter too.
Educational content only, not investment advice.