What is the spread in forex?
The spread is the gap between the bid price you can sell at and the ask price you can buy at. You pay it on every trade, the moment you open it. On EUR/USD it is often one or two pips or less, and it widens around the daily rollover, the weekly open and big news.
Open a trade and look at the profit column straight away. It is already slightly negative, although the price has not moved.
That small loss is the spread: the first cost of every trade, and the one most traders never add up.
Bid, ask and the gap between them
Every forex quote has two prices. The bid is what you get when you sell, and the ask is what you pay when you buy. The ask is the higher of the two, and the spread is the difference.
If the two sides of a quote are new to you, start with bid and ask prices. Here is a real one.
At 16:35 UTC on 29 October 2026, the Exness Standard MT5 server showed EUR/USD at 1.11605 bid and 1.11613 ask. The ask minus the bid is 0.00008, a spread of 0.8 pip.
Buy at 1.11613 and close at once, and you sell at the bid, 1.11605. You lose 0.8 pip while the market stands still. The price has to move 0.8 pip your way before the trade is back to zero.
Measuring spread in pips and points
On EUR/USD a pip is the fourth decimal place, 0.0001. Most brokers quote a fifth decimal, and one step of that digit is a point, 0.00001. Ten points make one pip.
MT5 counts spread in points. The 0.00008 above shows as 8 in the Market Watch spread column, which is 0.8 pip. Mix the two units up and a spread looks ten times better or worse than it is.
Yen pairs use fewer decimals. At the same moment USD/JPY was 157.848 bid and 157.858 ask. The gap is 0.010, which is 1 pip or 10 points, because a yen pip is 0.01.
Gold is clearest in money. XAU/USD was 4012.928 bid and 4013.168 ask, a spread of $0.24 per ounce. Brokers label gold pips in different ways, so compare gold spreads in dollars rather than pips.
What the spread costs you in money
The formula is short: spread cost = spread in pips × pip value × lots.
With a USD account, one pip on one standard lot of EUR/USD (100,000 euros) is worth $10. So the 0.8 pip spread above costs:
| Volume | Calculation | Spread cost |
|---|---|---|
| 1 lot | 0.8 × $10 × 1 | $8.00 |
| 0.10 lot | 0.8 × $10 × 0.10 | $0.80 |
| 0.01 lot | 0.8 × $10 × 0.01 | $0.08 |
Gold works the same way in ounces. One lot of gold is normally 100 ounces, so a $0.24 spread costs 0.24 × 100 = $24 per lot.
Each figure looks small. It adds up because you pay it on every trade: twenty 1-lot EUR/USD trades in a month at 0.8 pip is 20 × $8 = $160.
For other pairs and account currencies, the pip value calculator does the conversion.
Floating and fixed spreads
A floating spread, also called variable, moves with the market. It is tight when many liquidity providers are quoting and wider when they step back. Every account measured in this lesson quotes a floating spread.
A fixed spread stays the same in normal conditions. The broker carries the swings and usually prices that comfort into a wider quote. In fast markets it can requote your order instead, so read the account terms.
If you trade during busy hours, a floating spread tends to be the tighter of the two. A fixed spread buys predictability rather than a lower price.
When spreads widen
A spread is not one number. It changes through the day, and three moments matter most.
The daily rollover
At 17:00 New York time the trading day closes and liquidity thins for a while. On 28 October 2026 that moment fell at 21:00 UTC.
The Exness Standard EUR/USD spread sat at 0.8 pip almost all day, then read 2.9 to 4.7 pips between 21:07 and 21:47 UTC.
The XM Standard account showed the same pattern from a higher base. Its median over those 24 hours was 2.0 pips, and it peaked at 6.9 pips in the same rollover hour.
The weekly open
The market reopens on Sunday evening with few prices being made, so the first minutes often bring wide quotes and gaps.
Over the seven days to 29 October, the widest single reading on Exness Standard EUR/USD was 13.7 pips, while its typical value stayed at 0.8.
News and quieter pairs
Scheduled releases such as central bank decisions or US jobs data can widen spreads for seconds or minutes. An economic calendar shows when they are due.
Less traded pairs are wider all the time. At 16:35 UTC on 29 October, AUD/CAD was 1.8 pips on the same server, more than twice the EUR/USD figure.
How to check the spread before you trade
In MT5, right click Market Watch and switch on the Spread column. That shows the spread right now, which is a single sample.
The Spread Checker reads each broker's MT5 servers and shows the typical spread as the median of the last 12 hours, next to the cost per lot.
The spread is only part of the bill. Raw and zero accounts quote a thin spread and charge a commission per lot instead. Standard versus Raw accounts shows how to weigh the two.
Part of the cost can also come back. A forex rebate returns some of the broker's introducing commission per lot.
On 29 October 2026 AutoFXRebate listed about $3.20 per lot on Exness Standard EUR/USD, 40% of the typical spread. The quote stays the same; the net cost falls.
Questions
Is a lower spread always cheaper?
No. An account with a near-zero spread may charge commission per lot. Compare spread plus commission in dollars per lot, not the spread alone.
Why does my spread jump at night?
The jump usually lines up with the daily rollover at 17:00 New York time, when liquidity is thin for a few minutes. Avoid opening trades in that window if you can.
Do I pay the spread when I open or when I close?
Across the whole trade you cross it once: about half on the way in and half on the way out, measured from the middle price. If the spread is wider when you close, the exit costs more.
What is a normal spread on EUR/USD?
On 29 October 2026, accounts without commission at Exness and XM had median EUR/USD spreads of 0.6 to 2.0 pips. Raw accounts sat near 0.0 pip but charge commission.
Keep learning
Chapter 2How does a forex trade make or lose money?A forex trade makes money when the pair moves in your direction by more than the trade costs, and loses when it moves against you. A buy gains as the price rises and a sell gains as it falls. Profit is the price change times trade size, less commission and swap.
Chapter 2When do you buy or sell a currency pair?You buy a currency pair when you expect the first currency, the base, to strengthen against the second, and you sell when you expect it to weaken. If your view is about one currency, find which side of the pair it sits on: a weaker quote currency pushes the pair up, so you buy.
Chapter 2What is a pip in forex?A pip is the standard step traders use to measure price moves. On most currency pairs it is 0.0001, the fourth decimal place, and on pairs quoted in Japanese yen it is 0.01. A pipette is one tenth of a pip. On one standard lot of EUR/USD, each pip is worth $10.
Chapter 2What is a lot in forex?A lot is the unit used to set the size of a forex trade. One standard lot is 100,000 units of the base currency, a mini lot is 10,000 and a micro lot is 1,000. On EUR/USD that makes each pip worth $10, $1 and $0.10. Other instruments, such as gold, use their own contract size.
Chapter 2What are the bid and ask prices in forex?Every forex quote has two prices. The bid is the price at which you can sell, and the ask is the higher price at which you can buy. The gap between them is the spread. You buy at the ask and close at the bid, so every new trade starts slightly behind by the size of the spread.
Chapter 2Forex terms you will hear every day.The everyday words of forex describe what a trade is doing and what it costs. Long means you bought, short means you sold. A pip is the standard price step, a lot is the trade size, the spread is the gap between bid and ask, and margin is the deposit your broker holds while a trade is open.
Chapter 2What types of orders can you place in forex?A market order buys or sells straight away at the current price. A pending order waits for a price you choose: a limit order waits for a better price, and a stop order joins a move once price breaks a level. Stop loss and take profit orders close an open trade at prices you set in advance.
Chapter 2Forex order types cheat sheet.A market order fills now at the current price. A limit order waits for a better price: a buy limit below the market, a sell limit above it. A stop order waits for a worse price: a buy stop above, a sell stop below. Buy orders trigger on the ask, sell orders on the bid.
Chapter 2What is a forex demo account, and how should you use it?A forex demo account is a practice account funded with virtual money. You trade on the broker's platform with live or near-live prices, so you can learn orders, stops and margin without risking your own cash. Set it up with the balance and leverage you would really use, and expect live fills and feelings to differ.
Chapter 2Can you get rich trading forex?A few people make large sums trading forex, but the loss figures that EU and UK brokers must publish show that most retail CFD accounts at those brokers lose money. Getting rich would need a large starting balance and years of steady returns. Small accounts chasing big targets usually take risks large enough to wipe them out.
Chapter 2Forex basics cheat sheet: pairs, pips, lots, leverage and margin.This cheat sheet sums up the forex basics chapter on one page. Each idea gets a short summary, its formula and a link to the full lesson. The quick reference tables let you check pip sizes, pip values, contract sizes and margin before you place a trade, and one worked trade ties everything together.
