Popular Science: What is the spread in trading?

Spread refers to the difference between the buying price (Bid) and the selling price (Ask), representing one of the costs of foreign exchange transactions. For example, the selling price of the euro against the US dollar is 1.1474, while the buying price is 1.1478. The difference in the middle is 4 points, and this 104 points is what we call "spread", which can be regarded as the transaction fee charged by the platform.

The smaller the number of people trading a currency, the wider the bid-ask spread is usually.

The spread will also be related to the size of your capital.

How is the point value calculated?

The pip value is the profit and loss amount of 1 pip in the price. Taking the EUR/USD as an example, the trading volume is one lot (100,000). If the EUR/USD spills from 1.1483 to 1.1484, one point is equivalent to 0.0001, and the pip value = 0.0001x100000/1.1483 = 8.71 euros. Since it is traded in US dollars, it is converted to 8.71x1.1483 = 10 US dollars. Therefore, when the investment friend makes one more lot in the EUR/USD currency pair, if there is a slight increase, he can earn 10 US dollars.

Traders usually don't need to calculate their own pip values, and almost allForex PlatformThe software will automatically settle the settlement, but it is still quite useful for traders to be familiar with the calculation methods.