Lesson 5: Spread

“The spread is the difference between the bid and ask prices of a financial asset. For example, if the bid price is 1.1200 and the ask price is 1.1205, the spread is 5 pips. This is essentially the cost of opening a trade. Brokers or platforms earn money through spreads, and tighter spreads mean lower trading costs for you. Monitoring spreads is especially important in volatile markets, where they can widen unexpectedly.”