What Is the Spread in Forex and Why Does It Widen?
Direct answer
Forex spread basics
The spread is the difference between the price you can sell at (bid) and the price you can buy at (ask). On EUR/USD a 1-pip spread on one standard lot (100,000 euros) costs about $10, paid the moment you open the trade. Spreads are narrowest in liquid hours on major pairs and widen around the daily rollover, major news releases and thin holiday markets, which is why a stop can fill worse than planned.
- Spread = ask price minus bid price, usually quoted in pips
- EUR/USD: 1 pip on a standard lot ≈ $10, on a micro lot ≈ $0.10
- Spreads widen at the 5 p.m. New York rollover, around news and on holidays
- A wider spread can trigger stops and enlarge losses
Most new forex traders think about the price they enter at. The price they could exit at, a fraction lower, is the cost they actually pay first.
What people on X are asking
In November 2026 a trader asked how you can predict a news reaction correctly and still have the trade perform poorly, pointing to spread widening, slippage and thin liquidity. In September a risk-education account asked why a planned 1R stop became a 1.25R loss, tracing it to bid/ask triggers and spread widening. And in April another post asked whether your broker is betting against your strategy as a B-book counterparty. All three are about the gap between bid and ask.
The fact-checked answer
Bid, ask and the spread. A quote such as EUR/USD 1.08495 / 1.08503 means you can sell at 1.08495 and buy at 1.08503. The difference, 0.00008, is 0.8 pips. If you buy and the price does not move, you are immediately down by the spread.
Turning pips into money. For pairs quoted in US dollars, one pip (0.0001) on a standard lot of 100,000 units is worth $10. See what a pip is and what a lot size is for the full conversion.
What a spread costs on EUR/USD
Arithmetic by UXS for a USD-quoted pair at $10 per pip per standard lot. Commission accounts add a separate fee per lot; swap is charged on positions held overnight. Tap a column header to sort.
| 0.2 | $0.02 | $0.20 | $2 | $40 |
| 0.5 | $0.05 | $0.50 | $5 | $100 |
| 1.0 | $0.10 | $1.00 | $10 | $200 |
| 2.0 | $0.20 | $2.00 | $20 | $400 |
| 5.0 (news spike) | $0.50 | $5.00 | $50 | n/a |
Why spreads widen. Dealers quote tighter prices when many participants trade. Liquidity thins around the daily rollover at 5 p.m. New York time, when many banks' books roll to the next value date, over weekends and holidays, and in the seconds around major releases such as US payrolls. Spreads on exotic pairs are wider all the time. The BIS 2025 survey shows how concentrated activity is: EUR/USD alone was about 21% of global turnover of $9.6 trillion a day.
How widening hits stops. On most platforms a long position's stop triggers on the bid, a short's on the ask. If the spread jumps from 0.8 to 5 pips, a short's stop can trigger even though the chart's bid line never touched it. That explains many "stop hunts"; see best time to trade forex for the quieter hours.
Who sets the spread. With a market-making (B-book) broker the firm is the counterparty and earns the spread; agency (A-book) or ECN models pass orders to liquidity providers and often charge commission plus a raw spread. The CFTC's forex fraud advisory warns retail traders to check that a dealer is registered; in the US, retail forex dealers must be registered with the CFTC and be NFA members.
Quick poll
Which spread situation hurts you most?
What each answer means
- Spikes around news releases: Consider staying flat through major releases or using wider stops with smaller size.
- Rollover hours: Avoid opening or holding tight stops around 5 p.m. New York time.
- High spreads on exotic or minor pairs: Compare the spread with your average target; it may eat most of the edge.
- I don't know what my spreads are: Check your platform's spread history or log entry and exit prices against mid-price.
Your answer is stored only in this browser (localStorage). UXS does not collect, count or publish votes, so no totals are shown.
Spreads widen most around major releases; see how to trade around NFP.
Compare the spread with the day's range; see how many pips EUR/USD moves a day.
Spreads weigh most on short-term trades; see whether scalping can be profitable after spreads and commissions.
Slippage is the cousin of the spread; see why crypto market orders fill worse.
Spreads are far wider outside the majors; see why exotic currency pairs cost more to trade.
Spread widening can trigger stops that the chart never touched; see why price hits your stop-loss and reverses.
Decision helper
| If your typical target is… | A 1-pip spread costs… | Consider |
|---|---|---|
| 5 pips (scalping) | 20% of the target | Very tight-spread pairs and hours only |
| 20 pips | 5% | Manageable on majors |
| 100 pips (swing) | 1% | Spread matters less than swap |
Common mistakes
- Ignoring spread in backtests, which makes scalping systems look profitable.
- Placing stops exactly at a level, with no room for spread widening.
- Comparing brokers on advertised minimum spreads instead of typical spreads.
- Forgetting that a mid-price chart can hide the bid/ask your order actually uses.
FAQ
What is a good spread in forex?
On EUR/USD in liquid hours, retail spreads under 1 pip are common; for exotic pairs, many pips is normal.
Why did my stop loss trigger when price didn't reach it?
Your stop probably triggered on the bid or ask while the chart showed a different price, often during spread widening.
Is spread the same as commission?
No. Spread is built into the price; commission is a separate fee per lot on some account types.
When are forex spreads widest?
Around the 5 p.m. New York rollover, major data releases, weekends' open and holidays.
Does the spread matter for long-term trades?
Less: a 1-pip cost is small relative to a 100-pip move, but overnight swap becomes more important.
Do spreads apply when I close a trade?
You cross the spread once per round trip: buying at the ask and selling at the bid.
Sources
- CFTC: Foreign currency (forex) fraud advisory
- NFA: Investor education and resources
- BIS: Triennial Central Bank Survey 2025
- ESMA: Restrictions on CFDs for retail investors
Facts checked November 10, 2026. X posts are cited as evidence of the question, not of the answer.