Bid-Ask Spread

Trading Basics

Bid-Ask Spread

The difference between the price the trader and buy at and the price they can sell at.

Also bid-offer spread. The wider the spread, the more the trader pays, reactively.

Other Trading Basics

Basis Point

A basis point is 0.01% and is typically used when quoting interest rate changes.

A move of 0.25% is described as 25 basis points.

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Cost of Carry

The cost to a trader of maintaining a position. This might be in form of overnight financing on simple CFD trades but can also include the costs to insure, transport or finance on more complex trades.

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