What is Spread?

The gap between the bid and ask price — the cost you pay the moment any trade opens.

The spread is the difference between the price at which you can sell (the bid) and the price at which you can buy (the ask). If EUR/USD shows a bid of 1.0850 and an ask of 1.0852, the spread is two pips. Every trade starts that many pips in loss, because you buy at the higher price and would have to sell at the lower one. The spread is how most retail brokers earn, even on 'commission-free' accounts.

Spreads are not fixed: they compress when liquidity is deep (London and New York sessions) and widen violently when it is thin — after hours, on weekends in crypto, and in the seconds around major news releases. For short-term traders the spread is a serious tax: a scalper targeting 5-pip wins through a 2-pip spread gives away 40% of every winner. Checking the live spread before entry, and trading liquid hours, are basic professional hygiene.