Spread Visualiser
Why does a trade open already losing money? Widen and narrow the spread and watch the bid, the ask and the cost move.
Spread Visualiser
Tight spreads are typical on major pairs in busy hours; wider spreads are common on exotic pairs, in quiet hours or around news.
Advanced options
Some accounts charge a commission on top of a tighter spread.
Shows how much of it the spread uses up.
Cost of the spread
$20.00
Buyers pay the ask, but an open position is valued at the bid. With a 2-pip spread on 1 lots at $10.00 per pip, the trade opens −$20.00 behind. Price has to move 2 pips in favour just to reach break-even.
| Spread | Cost at this size |
|---|---|
| 0.2 pips | $2.00 |
| 0.5 pips | $5.00 |
| 1 pips | $10.00 |
| 2 pips | $20.00 |
| 3 pips | $30.00 |
| 5 pips | $50.00 |
Spreads change constantly and differ by broker and account type. This shows the cost of a fixed spread you choose; it does not include slippage, swaps or other fees.
How was this calculated?
- Ask = Bid + Spread = 1.10000 + 2 × 0.0001 = 1.10020
- Value of one pip at 1 lots = $10.00
- Spread cost = 2 pips × $10.00 = $20.00
What does this mean?
Every market has two prices at any moment: the bid, which is what buyers will pay and what a seller receives, and the ask, which is what a buyer has to pay. The ask is always a little higher. The gap between them is the spread.
A buy opens at the ask, but the position is valued at the bid, the price it could be sold at. So it opens a spread behind, and price has to move at least that far in its favour just to break even. The spread is how many brokers are paid.
The formula
Ask = Bid + Spread
Spread cost = Spread in pips × Value per pip (at the position size)
Break-even move = Spread (plus commission, if any)
Worked example
EUR/USD with a bid of 1.1000 and an ask of 1.1002 is a 2-pip spread. On one standard lot, where a pip is worth $10, buying at the ask opens the trade $20 behind. If the spread narrows to 0.5 pips, the same trade costs only $5.
Frequently asked questions
What is the bid-ask spread?
The difference between the highest price buyers are offering (bid) and the lowest price sellers are asking (ask). It is the basic cost of trading a market.
Why does a trade start in negative territory?
A position is valued at the price it could be closed at. A buy is closed at the bid, which is lower than the ask it was opened at, so it starts behind by the spread.
Do tighter spreads always mean cheaper trading?
Not always. Some accounts offer very tight spreads but charge a commission, so the total cost has to be compared, which is why a commission field is included.
Why do spreads change?
Spreads widen when fewer participants are trading, such as outside busy sessions, and around major news releases. They are usually tightest on the most heavily traded pairs during busy hours.
Learn more
This tool is for education and general information only and is not financial advice. Results are estimates that exclude spreads, commissions, swaps and slippage. Trading carries a risk of loss. Preferences you choose, such as your account currency, are remembered only in your own browser.