Our fixed spreads account allows trading with predetermined and steady spreads during volatile market hours with no sudden spikes, allowing traders to focus more on their strategies rather than the market. Download the MT4 platform and enjoy online trading with fast execution. PinoFX offers competitive spreads for all levels of our accounts. Open an account with us according to your preferences and explore its unique spreads.
What are Forex Spreads?
Although a spread can have several meanings in the field of finance, they all refer to the difference between the buy price and the sell price of an instrument. It is important to state that the former will always be higher than the latter, while the underlying market price will be in the middle of these two prices. While trading, you will either buy or sell the particular instrument you are trading, based on the assumption that the specific market price will rise or fall. Once a trade is placed and the price’s movement goes beyond the spread’s cost, the trade will be successful.Similarly, when the price remains between the spread range or outside of it, the trade will not be successful. In CFD trading, the spread is one of the key costs involved. The narrower the spread is the better value you will receive as a trader. Remember that there are risks to consider as well. For instance, some markets charge a commission or provide a combination of spread and commission. The spread is the last large number within a price rate.
Spreads in Different Contexts
Bid/ask price
The spread is, most commonly, the gap between the bid and the ask prices of a security or instrument such as stocks or commodities. This is also known as a bid-ask spread.
Trading Position
Spreads can also refer to the gap between a short position, also known as selling, in one futures contract or currency pair and a long position, also known as buying, in another. This is most commonly known as a spread trade.
Underwriting
In this field, spread is the difference between the amount paid to the legal entity and the price paid by the investor for that specific security, meaning the cost an underwriter pays to buy an issue, in comparison with the price at which the underwriter sells publicly.
Lending
Spreads also refer to the price a borrower pays above a benchmark bond to borrow money. For instance, if the prime interest rate is 3% and a borrower gets a mortgage with a 5% rate, the spread is 2%.
