How do spreads affect my trades?
The spread is a trading cost reflected in the prices available when opening and closing a position. Its impact varies depending on the financial instrument, trade volume, and prevailing market conditions. A wider spread increases the cost of entering a trade and may affect its initial unrealised profit or loss. To reach breakeven, the market price must move sufficiently in your favour to cover the spread and any other applicable trading costs.
How Is the Spread Calculated?
Spread = Ask Price − Bid Price
For example, if the EUR/USD exchange rate is displayed as follows:
- Bid Price: 1.12000
- Ask Price: 1.12005
- Spread: 0.00005 (equivalent to 0.5 pips)
This means the difference between the buying and selling prices is 0.5 pips at that particular moment.
Rather than being applied as a separate transaction fee, the spread is reflected directly in the instrument's quoted prices. It represents one of the primary trading costs associated with opening and closing a position.
Will account types affect the Spread Amount?
Some account types offer lower spreads but charge a separate commission, while others may have wider spreads with no additional commission.
The spread refers to the difference between the Bid and Ask prices, whereas commission is a separate trading fee that may apply.
When comparing account types, it is important to consider the overall trading cost, including both the spread and any applicable commission, rather than looking at the spread alone.
The table below shows the starting spreads for different account types:
| Account Type | Spread |
|---|---|
| Electronic Communication Network (ECN) Account | From 0.0 pips |
| Standard Straight Through Processing (STP) Account | From 1.0 pips |
| Premium Unlimited Account | From 0.1 pips |
How to check the live spreads
- Open Market Watch in MetaTrader 4 (MT4) or MetaTrader 5 (MT5). If it is not visible, select View → Market Watch.
- Right-click inside the panel and select Columns → Spread.
- The Spread column will appear next to the Bid and Ask prices.
- The displayed value is in points. For a five-decimal quote, divide the value by 10 to convert it to pips.
What if the spread is not displayed?
If the Spread column is still not visible, please contact our Support Team and provide a screenshot of your trading platform for further assistance.