What is Spread?
The spread is the difference between the bid (sell) and ask (buy) prices of an instrument, representing the broker's primary execution cost to the trader. Tight spreads are critical for scalpers and short-term traders. Prop firms with simulated-live accounts apply real-market spreads from their connected liquidity providers, meaning major news events temporarily widen spreads dramatically — a common cause of unexpected challenge failures. Major pairs like EUR/USD typically trade at 0.1-1.5 pip spreads in normal conditions.
Key takeaways
The difference between bid and ask prices.
Prop firms with simulated-live accounts apply real-market spreads from their connected liquidity providers, meaning major news events temporarily widen spreads dramatically — a common cause of unexpected challenge failures.
Major pairs like EUR/USD typically trade at 0.1-1.5 pip spreads in normal conditions.
Spread vs. Slippage
Two terms that frequently get conflated. Here's how they actually differ.
SpreadMarket Mechanics · PRO
SlippageMarket Mechanics · PRO
The difference between bid and ask prices.
The difference between expected and actual execution price.
Frequently asked questions
What is Spread?
The spread is the difference between the bid (sell) and ask (buy) prices of an instrument, representing the broker's primary execution cost to the trader. Tight spreads are critical for scalpers and short-term traders. Prop firms with simulated-live accounts apply real-market spreads from their connected liquidity providers, meaning major news events temporarily widen spreads dramatically — a common cause of unexpected challenge failures.
Why does Spread matter for prop firm traders?
Spread is one of the building blocks of how markets and trading actually work. Without a clean mental model of it, position sizing, risk calculations, and rule-compliance all break down.
How is Spread different from Slippage?
Spread and Slippage are commonly confused. Spread: The difference between bid and ask prices. Slippage, by contrast: The difference between expected and actual execution price.
What should traders watch out for with Spread?
Prop firms with simulated-live accounts apply real-market spreads from their connected liquidity providers, meaning major news events temporarily widen spreads dramatically — a common cause of unexpected challenge failures. Major pairs like EUR/USD typically trade at 0.1-1.5 pip spreads in normal conditions.