Short answer: The spread is the gap between the buy (ask) and sell (bid) price. You pay it every time you open a trade, because you buy slightly higher than you could sell. On EUR/USD a 1.2 pip spread costs about $12 per standard lot.
How you pay it
If EUR/USD shows 1.08500 / 1.08512, you can sell at 1.08500 or buy at 1.08512. The 1.2 pip gap is the spread. Open a buy and close it straight away, and you’ve lost exactly that gap. Every trade has to move by at least the spread before it’s in profit.
Fixed vs variable spreads
- Variable spreads move with the market. They’re tight in busy hours and widen around news, at the daily rollover and in thin markets.
- Fixed spreads stay the same in normal conditions but are usually wider on average, and the broker can still widen them in extreme moves.
“From 0.0 pips” isn’t the full price
A minimum spread is the best moment of the day, not what you’ll usually pay. Look for the broker’s average spread, and add any commission. That’s the all-in cost we show on every broker card.
When spreads get expensive
- Major news releases, like US jobs data or central bank decisions
- The first hour after the weekly open
- Exotic pairs and smaller indices
- The daily rollover, around 5pm New York time
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Most retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
