What is foreign exchange spread?
When you start trading, you will find that you get a "bid" price (selling price) and an "ask" price
(buying price). "Bid" refers to the price of selling the base currency, "ask" refers to the price of
buying the base currency. The difference between the two prices is what we call the spread.
When starting a transaction, there is always a third party facilitating the start and end of the
transaction (such as a bank or liquidity provider). These third parties must ensure the orderly flow
of purchase and sale orders, which means that they must find a buyer for each seller and vice versa.
The third party also bears the risk of loss while promoting the transaction, so the third party will
retain a part of each transaction - the retained part is called spread!