Friday, July 23, 2010

What is a spread?

A spread is the difference between the ask price (the price you buy at) and the bid price (the price you sell at) quoted in pips. Brokers make most of their money through the spread. Wider spreads result in a higher ask price and a lower bid price. As a consequence, you often may find yourself paying more when you buy and getting less when you sell. The spread compensates the market maker for taking on risk from the time


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