Bid Ask Spread in Forex
A clear definition of Bid Ask Spread, with practical context for reading markets and making better trading decisions.
Definition
Definition
The bid-ask spread is the gap between the bid price and the ask price. It is one of the transaction costs a trader encounters when entering and exiting at available market prices.
How It Works
Electronic markets separate the price you see, the instruction you send, and the final execution you receive. Available liquidity, order type, venue rules, and market movement can all affect what happens between those steps.
Why It Matters
This vocabulary lets you read a broker or platform screen accurately. The goal at Level 2 is mechanical literacy - knowing what a displayed price, order status, or execution record means - rather than predicting the market.
Key Takeaway
The bid-ask spread is the gap between the bid price and the ask price.
Practical forex example
Why Bid Ask Spread matters
Understanding Bid Ask Spread helps traders interpret market information, plan decisions, and manage risk with more context.
Related forex terms
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