Bid-Offer Spread in Forex
A clear definition of Bid-Offer Spread, with practical context for reading markets and making better trading decisions.
Definition
Definition
The bid-offer spread is another name for the difference between the market's bid and offer, or ask, prices. A narrower spread means the two quoted sides are closer together; a wider spread means they are farther apart.
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-offer spread is another name for the difference between the market's bid and offer, or ask, prices.
Practical forex example
Why Bid-Offer Spread matters
Understanding Bid-Offer Spread helps traders interpret market information, plan decisions, and manage risk with more context.
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