Description:

When trading forex, dealers always quote you two prices: the bid and the ask. The bid is what you can sell a pair for, while the ask is what you can buy it for. The ask is generally higher than the bid. The difference between the bid and ask is known as the spread. Essentially, it’s the cost to trade a pair, and can often be significantly affected by market liquidity. During times of high liquidity, spreads tend to be narrower. When liquidity is low, spreads are usually wider.