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Forex Basics

Spread

The difference between the bid and ask price of a currency pair.

Full Definition

The spread is the difference between the buying price (ask) and selling price (bid) of a currency pair. It represents the cost of trading and the broker's profit on the transaction. Spreads vary by pair, with majors having tighter spreads (1-2 pips) and exotics having wider spreads. Spreads can widen during low liquidity or high volatility periods.

Related Terms

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