Bid-Ask Spread The bid-ask spread is the difference between the bid price and the ask price and is a core trading cost.
What it means
The bid-ask spread is the difference between the bid price and the ask price and is a core trading cost.
Why it matters in live markets
In real markets, conditions like liquidity, volatility, and event risk can change quickly. That can affect quoted prices, spreads, and how orders fill. Understanding this term helps you interpret what you see on the platform and avoid incorrect assumptions when the market is moving fast.
Key points
- Quoted prices can change quickly in fast markets.
- Costs and outcomes depend on liquidity, volatility, and order type.
- Always consider the spread when calculating entry and exit levels.
Example: Bid 1.0798 and ask 1.0800 means the spread is 0.0002 (2 pips on a 4‑decimal quote).
Related glossary terms
Bid Price, Ask Price, Liquidity, Volatility, Execution Quality
Where you will see it
You will usually encounter this concept in platform quotes, order tickets, trade history, and market commentary. If you are comparing conditions across instruments, check product specifications and note that behaviour can differ by market and session.