Spread generally means "Extend." In the FX world, it refers to the difference between the bid price and the sell price.
A spread is simply defined as the price difference between where a trader may purchase or sell an underlying asset.
Spread is paid to broker as a commission. This is a MUST cost to every user.
Nowadays, Many brokers offers tighter spreads, some domestic brokers have spreads of $ / yen up to the stage of 0.2 sen.
Surely, a lot of users will choose a tighter spreads, however to overlook the entire system of a broker is much more important.
Judge a broker with its trade volume, trade execution and technical indicators should be always considered.
AtlasForex does not take part in unreasonable lower spread competitions. We are achieving on providing comprehensive high quality service.
Experience our excellent professional service.
Spread means "extend, price range", etc., and in the FX world, it refers to the price difference between the bid price (Bid) and the sell price (Ask) of a currency pairs.
If the dollar-yen rate is 110.10-110.15, the spread can be read as 5 sen.
This is a cost that the user must bear, and FX company cover its operating costs by spread.
Each brokers offer different spreads, tighter spreads always a popular choice for most users, but to look at overall service of a broker is a better choice.
Atlas Forex is achieving in how to provide a general good quality service, We don't charge additionally, you can make your trade more easier and safer.
Meanwhile, the level of speed differs for each currency pair as each currency has a different trading volume and trading method.
Rates offered by financial institutions determines spreads based on the number of buy and sell orders.
The higher the trading volume is, the higher the liquidity and more stable price is.
Those currencies with large trading volumes will have narrower bid-ask spreads than those that are infrequently traded.
Vise a versa, for currencies with low trading volumes, spreads tend to be more wider due to a broker will require more compensation for handling the transaction.
FX is the exchange of currencies= Bid and Ask
For example, let's say you buy dollar-yen currency pair. In this case, you are selling 'Yen' and buy 'Dollar' When you buy Euro-dollar, you are selling out 'dollar' and buy in 'Euro'
Next, if you buy euro-yen. When buying a Euro-yen, you will need to sell 'Yen' first for buy in 'dollar', then you will have to sell the 'dollar' for 'Euro'
For currency pairs that do not include the dollar, spreads tend to be more wider, as you required to buy and sell more.
Those are the main facts determines how wider the spread is.
Besides, each FX broker has different spreads.
Disclaimer Trading Forex and Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary.