JustChartsWhat Is the Spread in Forex? How It Is Measured and What It Costs
The spread is the difference between the bid price (where you can sell) and the ask price (where you can buy). If EUR/USD is quoted 1.10000 / 1.10010, the spread is 1 pip. You pay it on every trade: on one standard lot of EUR/USD, a 1-pip spread costs about $10. Spreads widen when liquidity is thin, such as around big news, rollover and weekends.
Key facts
- Spread
- ask price − bid price
- Cost of a trade
- spread (pips) × pip value × lots
- 1-pip spread, 1 lot EUR/USD
- ≈ $10
- Widest spreads
- news releases, rollover, Sunday open
- Tightest spreads
- major pairs in the London–New York overlap
Bid, ask and spread
- Bid — the price you get when you sell.
- Ask (or offer) — the price you pay when you buy.
- Spread — ask minus bid. It is how many brokers and market makers are paid.
Because you buy at the ask and could only sell immediately at the bid, every new position starts slightly negative by the size of the spread.
How to calculate the cost of the spread
Spread cost = spread in pips × pip value per lot × number of lots
Example: GBP/USD at 1.30000 / 1.30015 has a 1.5-pip spread. On 0.5 lot ($5 per pip): 1.5 × $5 = $7.50 per trade. If you trade 10 times a day, that is $75 a day before any profit.
Fixed vs variable spreads, and commissions
- Variable (floating) spreads move with market liquidity — most common.
- Fixed spreads stay the same but are usually wider on average.
- Raw/ECN accounts offer near-zero spreads plus a commission per lot. Compare total cost: spread + commission.
When do spreads widen?
- In the seconds around high-impact news such as NFP or CPI.
- Around the daily rollover (about 5:00 p.m. New York time).
- At the Sunday open and late on Friday.
- On exotic pairs and during holidays.
Scalpers and short-term traders feel spreads the most, because the spread is a larger share of a small target.
Frequently asked questions
What is a good spread in forex?
On EUR/USD, under about 1 pip (including commission) is competitive for retail traders. Minor and exotic pairs naturally have wider spreads.
Why does my trade start in a loss?
Because you bought at the ask and the position is valued at the bid (or vice versa for a sell). That small loss is the spread.
Why did the spread suddenly widen?
Liquidity dropped — usually because of a news release, the daily rollover, the weekend open or a holiday. Spreads normally narrow again once liquidity returns.
Put it into practice
Live charts, an economic calendar and trading calculators — free with a JustCharts account.
Check upcoming news before you tradeThis article is for education only and is not financial advice. Trading leveraged products carries a high risk of losing money. Contract sizes, trading hours and leverage limits vary by broker and country — always check your own broker’s specifications.