Forex spread |Spread in forex market | Commission
Forex Spread and Commission, this is the way the broker makes money, is by charging a spread and, in some cases, charging a commission on each trade.
If you’re looking at a quote for the GBP/USD and you’re about to take a trade on pair of GBP/USD price is 1.2230 – 1.2233.
On the right side is the buying price(Ask, offer Price), and on the left side is the selling price(Bid Price).
Now the Price at which you can buy it is over here on the right; they might call that the ask that’s the Price that you can buy it.
Now if you buy it at 1.2233, you can immediately sell it at 1.2230.
Have you made money or lost money?
You lost money.
So spread is the difference between Ask and Bid Price. It is the cost of your trade and income of your broker.
FIXED FOREX SPREAD
Fixed Spread is those who are mostly provided by Dealing Desk (DD) Brokers means to fix in 2 or 3 even 15 pips.
Each currency pair has a different spread; they can range from 1 pip to 15 pips so far you have to pay with fixed spread, you always know what will be paying.
VARIABLE FOREX SPREAD
It changes from second to second, and this change in the spread has to do with the liquidity of providers’ time.
These brokers get feeds from all of them, and the best prices go to you.
Maybe one question in mind, which is the better one, either Fixed or Variable, so you depend on your broker choice.
Mean which one you are choosing, for example, DD or NDD or even in NDD may be ECN, STP, or DMA.
BID / ASK DIFFERNCE
The difference between the Bid price and Ask price is a Forex Spread.
Every Forex broker has two sets of prices while one set of prices if you want to buy into a position and another one if you’re going to sell into a position.
The Bank( Or broker or fund manager) has to be the opposite side of your trade If you Buy. They have to Sell, and you Sell, they have to Buy.
Try Also Here,