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What is spread?


Gee Dee

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  • 3 weeks later...
On 10/26/2020 at 2:13 PM, Laidar said:

You can call it whatever you like, but the essence remains correct, that is, certain earnings of the broker.

broker earns only markup and commission. Spreads (bid-ask difference is charged by market makers) it's their tool to control flow of sell and buy orders (to some extent).

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The lowest spread is usually peculiar to the most popular instruments Floating changes in this type of spread regularly and completely depend on the situation on the market at the moment. This spread is not profitable in some strategies, and it can as well significantly hamper their testing., trading spread is a very important issue.

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On 10/10/2020 at 12:48 AM, gds221 said:

I consider this a kind of commission, because the amount of spread among brokers is different.

Yes spread is a kind of transaction fee you pay to market maker for liquidity (ability to open and close positions very quickly). I have very low spreads at Hotforex guess they use several liquidity providers which compete between each other to offer better conditions. 

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  • 2 weeks later...

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