One of the most frequently asked and frequently asked questions on trading forums is "What is the spread in Forex?".Today, let Anzo Capital try to find out from a different perspective.
In modern life, we have to pay for goods and services, including those offered in the financial markets. Similarly, in the financial markets, there is also a need to pay for goods and services, so the most popular and in-demand service in trading is brokerage. Brokerage companies provide access to international financial markets so that users can trade. Brokers charge a commission for their work, which is called a spread.
As Anzo Capital has already mentioned, we can define the spread as the commission charged by a broker for trading on a ** exchange. When an investor trades on an ** exchange, the investor does not do it himself, but simply places an order, which is the investor's desire to buy and sell an asset. Investors pay a portion of the transaction to the broker on the exchange as a brokerage service.
So what exactly is the interest rate differential in Forex?
To put it simply, Anzo Capital believes that spreads mean the fees charged to make a trade. For the purposes of trading, the spread is the difference between the bid and ask price of an asset.