Dealing spread definition

Dealing spread

The dealing spread is the difference between the bid (sell) price and the ask (buy) price for different currency pairs. It is also known as the ‘spread’ or ‘bid-offer spread’ and is represented by the number of pips between the bid price and the ask price.

What are the types of spread?

Fixed Spread: Often safer than variable spreads, fixed spreads are offered by brokers who buy large positions on the market and offer smaller chunks in fixed positions to traders. However, the broker often requotes the price as the market rapidly changes.

Variable Spread: In a variable spread the difference between the bid and ask prices constantly change. Trading variable spreads avoids the risk of being requoted by brokers with fixed spreads. However, the volatility of the forex market often makes variable spreads even more unpredictable and riskier to trade.

Search the Glossary

Look up the meaning of hundreds of trading terms in our comprehensive glossary.

A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z