Do most brokers use the same formula to calculate the spread? Is the spread just (Ask - Bid)?
Yes, the formula is correct. However every different broker have different charges.
Yep! That’s what spread means. What differs with different brokers is the price you are liable to pay as spread for every trade that you make. While some brokers will give you 0 pips (in some cases) like ic markets and fxview, others will have invariably higher spreads because the commissions are a part of the spread. Taking example of fxview again, it charges commission and spread separately, so spreads are low.
Another variation comes in the form of fixed vs variable spreads. Which is better? Depends on the trading style of each trader.
Good information to know. Thanks
Yes, that is correct
Its the same formula but one broker’s ask price is not the same as another’s, nor is their bid price. so their spreads can vary. Spreads can also be widened out significantly when markets are very busy or very quiet. Check the quote figures, not just the charts.
Please compare your brokers before you register with someone; every broker offers different spreads.
That’s the general formula; however, every broker offers a different spread.
Some brokers offer low spreads, and some do not. It’s up to your trading needs. I compare brokers online before looking at criteria like commissions & spreads.
[Removed for Forums policy violation] In order to determine the spread in forex, you must first compute the difference in pips between the buy and sell prices.
Subtracting the bid price from the asking price accomplishes this.
For example, if you trade the GBP/USD pair at 1.3089/1.3091, the spread is 1.3091 – 1.3089, or 0.0002. (2 pips).
formula is always the same but each broker can set their own spread so try to check all brokers for their spread before you settle for one.
What you ask from your broker might not be same for other it depends upon the quote from LPs and demand and supply for the particular pair.