Spread refers to the difference between the Ask and the Bid prices of an asset at a specific time. Since a broker enables the market, he would sell to a trader at a slightly higher (Ask) price than he would buy from a trader (Bid price). The difference - the spread - incorporates a broker’s commission for providing the service.

The spread is shown in pips and can vary over time. The size of the spread matters to a trader. Since he buys at the Ask and sells at the Bid, the narrower the spread, the faster his position may become profitable.

The size of a spread can be influenced by volatility and liquidity in the market. In the low volatility and high liquidity markets, spreads tend to be narrow. If markets become volatile (for example, due to major economic events or news), the spread can widen. Similarly, if there is not enough liquidity (which can be the case with an emerging cryptocurrency market), the spread also increases.

Spread on CEX.IO Broker
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