In the Forex market, the spread is the difference between a currency pair’s buy and sell prices offered by a broker.
In buying and selling, the bid refers to the highest price a buyer will offer for a security or currency. If you have a product someone is willing to buy for $100, then $100 is the bid price. This is the highest amount the buyer is offering.
The ask price is the lowest price a seller is willing to accept for a security or currency.
example : If you want to sell your product for $105, then $105 is the ask price. This is the minimum amount the seller is willing to accept to complete the sale.
Therefore, If we want to buy that asset or currency for $100, but the seller wants to sell it for $105, then $5 is the difference between the prices, or called the spread and if you want to make a profit with your product You need to set the selling price at more than $105 to avoid losses. You can see that $5 is considered a very important cost in setting the trading price.
For example: In case you want to trade (EUR/USD)
- Bid Price: 1.1100 USD (Price at which the broker will buy EUR from you)
- Ask Price: 1.1105 USD (Price at which the broker will sell you EUR)
- Spread: 1.1105 – 1.1100 = 0.0005 USD or 5 pips
The spread, typically measured in pips for forex, is an additional cost factored into the price of buying or selling a security or currency.This is where considering brokers with lower spreads can potentially reduce your trading costs.
How important is the spread in Forex trading?
Spreads are the key trading cost in forex. Lower spreads reduce funding costs on trades, making profits easier to achieve. Conversely, high spreads eat into profits, requiring larger price movements to be successful.
The spread, typically measured in pips, is a key factor in the cost of a trade. Brokers offer different spreads, which can depend on your account type. Additionally, market volatility and liquidity can cause the spread to fluctuate throughout the day as supply and demand for currencies change.
How to reduce spreads with UTSPAY ?
How will it be if you don’t have to pay the spread
Every forex trader confronts the “spread,” the difference between a broker’s buy (bid) and sell (ask) price. Often overlooked, the spread is a trading cost that can be minimized. UTSPAY helps you achieve lower costs and potentially greater profits by getting your spread money back.
Increase your chances of boosting a profit when you don’t have to pay spreads. Your trading costs will be reduce. Your profits will increase and you can manage your risks better and make accurate trading decisions. We give you the opportunity to trade to your fullest potential. By returning the spread rebate, just open a brokerage account with UTSPAY.
UTSPAY empowers professional traders. We understand every investment holds significance, and we’re committed to delivering the best possible trading experience. Unlock higher profits by eliminating spreads.
Sign up, open an account, and get more cashback forex today.
Download the application UTSPAY
App Store: https://link.utspay.com/spreadios
Play Store: https://link.utspay.com/spreadandroid
