7. What Is Spread?

A spread can have several meanings in finance. Generally, the spread refers to the difference between two prices. In one of the most common definitions, the spread is the gap between the bid and the ask prices. This is known as a bid-ask spread.

This spread is the fee for providing transaction immediacy. This is why the terms “transaction cost” and “bid-ask spread” are used interchangeably.

Instead of charging a separate fee for making a trade, the cost is built into the buy and sell price of the currency pair you want to trade.