Spreads

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Spreads

The “bid” is the price at which you can sell the base currency.

The “ask” is the price at which you can buy the base currency.

The difference between these two prices is known as the spread.

The following are the types of spreads are used in Forex Trading

Fixed spread

Difference between ASK and BID is kept constant and do not depend on market conditions. Fixed spreads are set by dealing companies for automatically traded accounts.

Fixed spread with an extension

Certain part of a spread is predetermined and another part may be adjusted by a dealer according to market.

Variable spread

Fluctuates in correlation with market conditions. Generally variable spread is low during times of market inactivity (approximately 1-2 pips), but during volatile market can actually widen to as much as 40-50 pips. This type of spread is closer to real market but brings higher uncertainty to trade and makes creation of effective strategy more difficult.

There are several factors that influence the size of the bid-offer spread. The most important is currency liquidity.

EONE provides different spreads as per the type of accounts.

  • 2 PIPs for OneMaker account group
  • 1.6 PIPs for OneTrader account group
  • 0.8 PIPs for OneProfessional account group
  • 0 PIPs for OneMarket and OneRoyal account groups