Two sides of a quote
The bid is the price at which you can generally sell; the ask is the price at which you can generally buy. Their difference is the spread.
Illustrative calculation
An illustrative bid of 1.1000 and ask of 1.1002 has a spread of 0.0002. For a currency pair with a conventional pip size of 0.0001, that is two pips. Pip conventions differ across instruments.
Why spreads vary
A quoted spread can change with liquidity, volatility and market hours. A stated minimum is not necessarily the spread available at the moment you trade.
Compare the whole cost
Translate the spread into money for your intended position size. Then consider commission, overnight financing and conversion. A smaller spread alone does not establish the lowest total cost.
Frequently asked
Is the spread the only cost?
No. Other account and product charges may apply, including commission and financing.
Further reading
FCA: Contracts for difference ↗External educational references do not imply endorsement, affiliation or regulation of QB Capitals.
Leveraged forex and CFDs involve significant risk of loss. Demo results do not predict live performance. Understand the risks ↗