Every forex trade starts slightly in the red. That gap is the spread — the difference between the price you can buy at and the price you can sell at. For most retail traders it is the largest trading cost, and it matters even more when you are working through a bonus volume requirement.
Bid, ask and spread
Your platform shows two prices for every pair:
- Bid – the price at which you can sell.
- Ask – the price at which you can buy.
If EUR/USD shows 1.08500 / 1.08512, the spread is 0.00012, or 1.2 pips. Buy and immediately sell, and you lose those 1.2 pips.
How to calculate spread cost in money
Spread cost = spread in pips × pip value × lots.
- EUR/USD, 1.2 pips, 1 standard lot: 1.2 × $10 × 1 = $12.
- EUR/USD, 1.2 pips, 0.05 lots: 1.2 × $10 × 0.05 = $0.60.
- GBP/JPY, 3 pips, 0.10 lots (pip ≈ $0.65 per 0.10 lot at typical rates): ≈ $1.95.
Get the exact pip value for any pair with the pip value calculator.
Fixed vs variable spreads
| Fixed spread | Variable (floating) spread | |
|---|---|---|
| How it works | Stays the same in normal conditions | Moves with market liquidity |
| Typical level | Higher on average | Lower during busy sessions, wider at quiet times and news |
| Best for | Predictable costs, small accounts | Active traders in liquid hours |
| Watch out for | Requotes during fast markets | Spikes at rollover and news |
Spread-only vs commission accounts
Many brokers offer two account types:
- Standard account – no commission, wider spread (for example 1.0–1.8 pips on EUR/USD).
- Raw / ECN account – very tight spread (0.0–0.3 pips) plus a commission, often around $6–$7 per standard lot round turn.
Compare them by total cost per lot. A 0.1 pip spread plus $7 commission costs $8 per lot on EUR/USD; a 1.2 pip spread with no commission costs $12. For high-volume traders the raw account is usually cheaper.
What makes spreads widen
- Low liquidity – late New York session, the daily rollover around 22:00 GMT, and holidays.
- High-impact news – central bank decisions, inflation and employment data.
- Exotic pairs – currencies with low trading volume, such as USD/TRY or USD/ZAR, have much wider spreads.
See when each market is busiest in our guide to forex market hours.
Other trading costs
- Swap (overnight financing) – charged or paid when positions are held past the daily rollover.
- Slippage – the difference between requested and executed price in fast markets.
- Deposit/withdrawal and inactivity fees – check the broker's fee page.
Why spreads matter for bonuses
A bonus that requires 50 standard lots of volume on a 1.5-pip account costs about $750 in spreads alone. Always multiply the volume requirement by your spread cost before accepting — our article on bonus lot requirements shows how.