No, no, no, no. This is all totally wrong. @Sureshhey you have been lead astray by common marketing deception perpetuated by the posters in this thread. Lets start with your original post.
Your broker (and I mean the everyday retail bucket shop we all must trade with unless you have some stupidly large investment account already) makes no money from the spread. The price quoted are exactly that, a quote price for referencing. Your broker makes money because you and I are quite capable of losing it ourselves with bad decisions. Lets dive into it a bit more.
First you need to understand is that you are a buyer, never a seller. You are buying a sophisticated over the counter (OTC) derivative commonly know as a contract for difference (CFD). Forget currency, forget pairs, forget “markets”, forget all the other mumbo jumbo you might have been told.
A derivative is a contract that “derives” it’s value from an underlying asset. In our case spot currency rates. OTC means a contract privately negotiate between two parties. You and your broker. No-one else. This private negotiation is disclosed in your brokers PDS. You accept these terms and conditions when you open an account with your broker.
In the terms of this contract you are defined as the “buyer” and your broker is the “seller.” Your broker is selling you the contract. You will either buy a Long contract or a short contract. You agree to pay the difference in value of the underlying asset upon closure of the contract. If that difference is negative your broker agrees to pay you. When you enter a long contract that difference is calculated as the Open price - Close price. For a short contract it is Close price - Open price. In essence if you buy a long contract and the price moves up you profit, if you buy a short contract and the price falls you profit.
If the price moves the other way, your broker profits. Thats how they make their money. No difference to a bookie or a casino.
Now there is plenty written elsewhere about Buy price (Ask), Sell price (Bid) and spread. They exist in the underlying market for that asset you are speculating on. Your broker makes no money from the spread. It is simply the difference between the asking price and the bid price. However the ask and bid price is referenced to the opening and closing price of the contract you just entered into. A long contract your opening price is the bid and the close is the ask, a short contract visa versa. This ensures your broker can offset the risk of entering into a contract with you. Much like the zeros on a roulette wheel manages risk at a casino.
Undoubtedly this response will raise more questions than answers. There are those out there that could dive more deeper into the subject than I can. Hopefully they will come along, correct me where needed and expand all of our knowledge. Maybe I’ve just opened Pandora’s box. So I’ll stop there and wish you good night and await any replies.