What is the spread/spread in the foreign exchange market?
The spread is the difference between the bid price (also called the bid price) and the ask price (also called the asking price). A currency pair has two prices, which represent the difference the market maker gets when buying or selling with an investor. If investors buy or sell quickly with no change in the exchange rate, they suffer losses due to the spread, which is usually lower than the asking price.
For example, the bid/ask price for EUR/USD at your bank might be 2015/1.3015. There is a spread of 1000 basis points. This spread is very high compared to the bid/ask price of an online forex investor, for example, 2015/1.2020, which is only 5 basis points.
Overall, small spreads are more beneficial to foreign exchange investors because small fluctuations in exchange rates make it easier for them to profit from trading.
Spreads are a source of revenue for market makers.
Please indicate the source: https://www.daoctech.com/fxoutrade/1982.html
Disclaimer: The content of this article does not represent the views of the Institute of Foreign Exchange. The content is for reference only and does not constitute investment advice. Investors operate accordingly at their own risk.