Spread
Spread is the difference between the bid and ask price quoted for a financial instrument.
It is a trading cost built into the quote rather than billed as a fee: at a broker's quoted prices, a market buy fills at the ask and a market sell at the bid, so a position opened and closed at an unchanged quote costs one full spread. Measured at the side of the quote it closes on, every position opened this way shows a floating loss equal to the spread; with the spread unchanged and before any commission, the price must move by the spread in the position's favour to reach breakeven, and further to show a profit.
This page covers the mechanic; it is not trading advice.
What spread looks like at the moment of entry
EUR/USD quoted as 1.0820 / 1.0822 has a 2-pip spread (0.0002). Buying euro at 1.0822 means immediately holding a position that, if measured at the sellable price, is worth 1.0820 — a $20 cost on a 1 standard lot before the market has moved.
The same principle applies to every CFD, including those on equity indices, and to crypto pairs a broker quotes. At a broker's quoted prices, each instrument is bought at the ask and sold at the bid, so a round trip at an unchanged quote costs one full spread: half against the mid-price at entry and half at exit. Spread is not a separate fee billed later; it is paid by the structure of the price quote itself.
What spread costs across a trading week
A trader running 20 round-trip trades per week on EUR/USD at an average 1.2-pip spread, trading 1 standard lot per trade, pays 20 × 1.2 × $10 = $240 per week in spread alone. On a $10,000 account, that is a 2.4% weekly drag before any consideration of swap, Commission, or strategy edge.
Variable spread is not constant. On raw-spread accounts, which add a separate commission, the variable spread floor on EUR/USD typically sits at 0.1–0.3 pips during the London-New York session overlap (13:00–17:00 UTC while neither the UK nor the US is on daylight saving time, 12:00–16:00 UTC while both are, 12:00–17:00 UTC in the weeks when only the US is). Outside the main London and New York hours the spread widens, and around major scheduled releases (US Non-Farm Payrolls, CPI, FOMC decisions) it widens further as market-maker liquidity withdraws: as an illustrative figure that varies by broker and account type, 5–10 pips on EUR/USD.
A plain stop-loss is a trigger, not a guaranteed fill price. On MetaTrader, and by default on cTrader, a long position's stop is checked against the bid, and once the bid reaches it the position closes at the price the broker fills. In a fast market around a release that fill can come several pips beyond the stop, so a stop set 10 pips from entry can close the trade at a loss of more than 10 pips. A spread that is already wide brings the trigger closer, because a 5-pip spread puts the bid of a long position, or the ask of a short one, further from the mid-price. When the spread widens suddenly, the bid or ask moves in one jump, and if that jump crosses the stop the fill lands beyond it, as after a price gap. Guaranteed-stop products, where a broker offers them, follow their own published terms. This is mechanics, not malfunction.
Related terms
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Common questions
What is the difference between fixed and variable spread?
Fixed-spread accounts quote a spread that stays the same as market conditions change in normal trading, and price it higher than variable floors: as illustrative figures that vary by broker, 1.5 to 2 pips on EUR/USD, against 0.1 to 0.3 pips on a raw-spread account, which adds a separate commission. Each broker's terms set what happens to a fixed spread around major releases and in thin markets, and under instant execution, which the broker sets per symbol, a request can be answered with a requote at a new price instead of a fill. During peak liquidity, at an assumed $7 round-turn commission per standard lot, a 0.1–0.3-pip raw spread comes to 0.8–1.0 pip equivalent, below the fixed range; outside peak hours and around releases the raw spread widens. The correct comparison is the average paid across the actual trading pattern, not the minimum advertised.
Why does spread widen during news events?
During major data releases, market makers reduce quoted depth to protect against adverse selection — they do not know which direction prices will move and pull liquidity to limit exposure. The spread widens to compensate for the increased risk of being filled on a moving market. As an illustrative figure that varies by broker, the spread on EUR/USD can reach 5–10 pips around a major release, against a peak-hours floor of 0.1–0.3 pips on raw-spread accounts; the width is set by the liquidity providers' quotes or the broker's own.