Spread

The spread is the difference between the buy (bid) and sell (ask) price of an asset. 

Explanation

It represents the cost of trading and is a source of profit for brokers. 

Practical Example of Spread

A forex trader sees the EUR/USD pair with a bid price of 1.1200 and an ask price of 1.1202, resulting in a spread of 2 pips.

‍