// TRADING TERMINOLOGY
What is Spread?
The spread is the difference between the buy (bid) price and the sell (ask) price of a financial instrument.
In-Depth Explanation
The spread is essentially the cost of the trade. Brokers often do not charge a separate commission on spread betting accounts, instead making their money through the spread. A "tight" spread means there is a small difference between the prices, which is better for the trader.
Practical Example
"If the bid price for FTSE 100 is 7600 and the ask price is 7601, the spread is 1 point."
Master the language of risk
Knowing the terms is just the start. Learning how to apply them is where the edge is found.
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