How is the foreign exchange spread calculated?

Foreign exchange spread = buying price-selling price.

The price difference is essentially the difference between the buying price and the selling price. Because traders tend to exchange one currency for another, foreign exchange trading currencies are usually quoted at the current price compared with another currency. For convenience, these currencies are written in pairs, such as AUD/USD and AUD/USD-where AUD is the basic currency and USD is called relative currency.

Extended data

As far as spreads are concerned, generally speaking, the more active and larger the market is, the lower the spreads are. On the other hand, the smaller the market, the smaller the currency circulation and the larger the spread. The price difference of commodities provided by traders is an important factor that affects whether customers choose this trader.

As far as the choice of spread is concerned, under normal circumstances, the more mature traders are, the more they will analyze and choose floating spread, and they will also have good returns; On the other hand, traders who are new to the market have insufficient experience in all aspects and immature mentality. Only by choosing a fixed spread can they better ensure transaction costs, reduce losses and avoid risks.

The foreign exchange trading platform takes the spread as the handling fee charged for each transaction. No matter what currency is traded, the spread of that currency becomes a handling fee. The spread is the transaction cost of investors.

Baidu encyclopedia-spread trading

Baidu encyclopedia-foreign exchange spread