SPREADS

WHAT IS A SPREAD ON THE FOREX EXCHANGE

Spread is the difference between the buy rate and the sell rate. Its value changes depending on the selected currency pair.

WHAT IS A SPREAD?

In the window for opening a trade order, you can see 2 prices. For example, if you open EUR / USD, you can see similar numbers 1.11756 / 1.11762. The first digit is the purchase price. The second number is the selling price. The difference between them is called the spread. In fact, it is this difference that acts as a commission for opening a deal on the platform.

WHY DO YOU NEED A SPREAD?

By and large, the difference is due to modern trends in the economy and finance. Let me explain with an example. Every person has dealt with currency exchange offices at least once in his life. There are always 2 prices there: for buying and for selling. That is, this is the cost at which the bank is ready to exchange currency. The difference between these numbers is the bank's commission and profit. The situation is similar in the Forex market.

The spread is paid at the moment a position is opened. As soon as the investor opens a deal, the commission is debited from the account, the amount of which is determined by the company's policy, and the amount of which is displayed on the trading platform.