# Spread

**Spread** is the difference between the sell price (Ask) and the buy price (Bid) of an asset in the order book. The spread shows how much sellers' and buyers' price expectations differ.

The spread helps assess asset liquidity and understand how profitable it is to make a trade right now.

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### How Spread is Calculated

Calculation formula: **Spread = Ask − Bid**

Where:

* **Ask** — sell price (the lowest price at which you can buy the asset)
* **Bid** — buy price (the highest price at which you can sell the asset)

#### Example

In the order book you see:

* Sell price (Ask) — 100.50
* Buy price (Bid) — 100.48

Spread = 100.50 − 100.48 = **0.02**

This means the difference between the price at which you can buy the asset right now and the price at which you can sell it is 0.02.

***

### What the Spread Shows

#### Narrow Spread

**Signs:** Minimal difference between Ask and Bid, prices are close to each other.

**What this means:**

* High asset liquidity
* Many participants are ready to trade
* You can easily buy or sell the asset close to the current price
* Your trade will not significantly affect the market

#### Wide Spread

**Signs:** Significant difference between Ask and Bid, prices are far apart.

**What this means:**

* Low asset liquidity
* Few participants are ready to trade right now
* Harder to find a counterparty for the trade
* Your trade may noticeably change the price
* Higher probability of slippage

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### Why Spread Changes

**Trading session time:** During active trading hours, the spread is usually narrower; at the beginning/end of the session or at night, the spread may widen.

**Market volatility:** During sharp price movements, the spread widens. During calm periods, the spread is usually narrower.

**News and events:** Before important news, the spread often widens as participants exit the market. After publication, liquidity may return.

**Trading volume:** High volume usually narrows the spread, low volume widens it.

**Asset type:** Popular assets have narrow spreads, exotic or illiquid assets have wide spreads.

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### How to Use Spread Information

#### Liquidity Assessment

Before opening a position, check the current spread:

* Narrow spread — high liquidity, you can trade safely
* Wide spread — low liquidity, consider whether it's worth entering a position now

#### Impact on Trading

**With narrow spread:**

* Slippage will be minimal
* Easier to enter and exit positions

**With wide spread:**

* Higher probability of slippage
* Harder to execute a trade at the desired price
* Consider trading during more liquid times

#### Cost Calculation

Spread is your hidden cost when trading. If you bought an asset at Ask and immediately sold at Bid, you would lose the spread amount. The more frequently you trade, the more the spread affects your profit.

**Example:** You bought an asset at 100.50 (Ask) and immediately decided to sell at 100.48 (Bid). Your loss will be 0.02 per unit of asset, even if the price hasn't changed.

***

### ⚠️ Important Spread Features

**Spread is not an exchange commission.** The spread is formed by market participants, not the exchange. The exchange commission is a separate payment for executing a trade.

**Spread can widen sharply.** During moments of high volatility or low liquidity, the spread can increase several times in seconds.

**Spread is asymmetric.** If you buy, you pay Ask. If you sell, you receive Bid. This means that for a breakeven position close, the price must move at least the spread amount in your favor.


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