Spread refers to the difference between the bid and ask price of an exchange rate. The investor who invests in the forex market does not buy and sell the exchange rate at a single price. There is a bid price and a ask price in the market for the relevant exchange rate. There is no commission in Forex transactions. Only the transaction cost called spread is paid. The transaction cost, which is the difference between the bid and ask price that the investor pays when trading, is called the spread.

For example; Let’s assume that the bid price for the EUR/USD pair is 1.0593 and the ask price is 1.0591. At the given price level, the spread for the EUR/USD pair is 2 pips. That is, the cost of trading FX for 1 lot on the EUR/USD pair is 2 pips. Since the spread in the Forex market is the difference between the bid and ask price of the traded pair, it varies depending on the product being traded.