By Saskia, Forex Trader & Coach at FXC Academy | Last updated: May, 2026

• The spread is the difference between the bid and ask price
• Spreads represent part of the trading cost
• Lower spreads often occur during high liquidity
• Spreads can widen during volatility or news events
• Market sessions influence spread size

In Forex trading, the spread is the difference between the buy price (ask price) and the sell price (bid price) of a currency pair.

The spread represents a trading cost and is one of the main concepts traders learn when understanding how the Forex market operates.

The price at which the market is willing to buy from you.

The price at which the market is willing to sell to you.

The difference between these two prices is called the spread.

Example

• EUR/USD bid price: 1.3000
• EUR/USD ask price: 1.3002

The spread is:

• 2 pips

This difference is a normal part of Forex trading.

Spreads exist because they reflect the difference between buying and selling prices in the market.

They are influenced by factors such as:

• market liquidity
• volatility
• trading volume
• broker pricing structure

In highly active markets, spreads are often smaller because there are more participants trading.

Forex spreads can change throughout the day depending on market activity.

For example:

• during the London and New York sessions, spreads are often lower due to higher liquidity
• during quieter periods, spreads may widen

This is why many traders monitor trading sessions closely.

Spreads may increase during periods of high market volatility.

Examples include:

• major economic news releases
• central bank announcements
• geopolitical events

During these periods:

• price movements can become more unpredictable
• liquidity may decrease temporarily
• spreads can widen rapidly

Financial regulators such as the Financial Conduct Authority (FCA) highlight that volatile market conditions can increase trading risk.

Understanding spread is important because it affects:

• trade entry and exit pricing
• short-term trading costs
• overall market conditions

For example:

• traders using shorter-term strategies may pay closer attention to spread changes due to frequent market entries and exits

Imagine:

• EUR/USD ask price = 1.1002
• EUR/USD bid price = 1.1000

If a trader buys immediately, the trade begins slightly negative because of the spread difference.

The market would need to move beyond the spread before the position moves into profit.

This is why spread is considered part of trading cost analysis.

Understanding spreads is often part of broader Forex education alongside:

• leverage
• market sessions
• liquidity
• volatility
• risk management

Within educational platforms such as FXC Academy, traders are introduced to how market conditions can influence spreads and overall trading environments.

Structured learning pathways may also include guided reviews and practical examples to help learners understand how spreads behave during different market scenarios.

FXC Academy is a Forex education platform that provides guides, courses, and learning resources designed to help traders understand currency markets, trading strategies, and risk management.

Our educational content supports traders at different stages of their journey, from beginners learning the fundamentals to more experienced traders refining their trading knowledge.

Risk Warning
Forex trading involves significant risk and may not be suitable for all investors. You could lose all of your invested capital. This content is for educational purposes only and does not constitute financial advice.