What Is a Forex Spread?
A forex spread is the difference between the bid price and the ask price of a currency pair. The bid price is the highest price a buyer is willing to pay, while the ask price is the lowest price a seller will accept. This gap—the spread—is how most forex brokers earn revenue on each trade you place.
For example, if EUR/USD has a bid of 1.0850 and an ask of 1.0851, the spread is 0.0001, or 1 pip. When you open a buy trade, you enter at the ask price and immediately face an unrealized loss equal to the spread. The market must move in your favor by at least the spread amount before you break even. Understanding spread costs is essential for evaluating broker fees and optimizing your trading strategy.
How to Use This Forex Spread Calculator
- 1
Select a Currency Pair
Choose from 20+ preloaded currency pairs across major, minor, and exotic categories. The bid and ask prices will auto-fill with typical market values.
- 2
Enter Bid and Ask Prices
Adjust the bid and ask prices to match your broker's current quotes. You can use the preset values or enter custom prices for accurate cost calculation.
- 3
Choose Lot Type and Quantity
Select standard (100K), mini (10K), or micro (1K) lot size, then specify how many lots you plan to trade.
- 4
View Your Spread Cost
Click “Calculate Spread” to see the spread in pips, cost per lot, total cost, pip value, and a comparison table across all currency pairs.
Fixed vs Variable Spreads
Fixed spreads remain constant regardless of market conditions. They are common with market-maker brokers and provide predictable trading costs. However, fixed spreads are typically wider than the tightest variable spreads available during peak liquidity hours.
Variable spreads fluctuate based on market liquidity and volatility. During the London-New York overlap session (8:00–12:00 EST), major pairs like EUR/USD can trade with spreads as low as 0.1–0.5 pips. During off-peak hours, news releases, or low-liquidity events, spreads can widen significantly—sometimes to 5–10 pips or more on major pairs.
Factors That Affect Forex Spreads
Several factors influence how wide or tight a forex spread will be at any given moment:
- Liquidity — Higher trading volume leads to tighter spreads. Major pairs have the most liquidity and therefore the tightest spreads.
- Volatility — During high-impact news events (NFP, FOMC, ECB decisions), spreads widen as market makers increase their risk buffer.
- Trading Session — Spreads are tightest during the London-New York overlap and widest during the Asian session for non-Asian pairs.
- Broker Type — ECN/STP brokers typically offer tighter raw spreads plus a commission, while market makers embed their fee in wider spreads.
- Currency Pair — Exotic pairs with lower trading volume naturally have wider spreads than major pairs.
Why Use Our Forex Spread Calculator?
Instant Pip Calculation
Convert any bid-ask difference into pips automatically, handling both standard (4-decimal) and JPY (2-decimal) pairs correctly.
Dollar Cost Breakdown
See the exact dollar cost per lot and total cost for your position size, so you know your trading expenses upfront.
Cross-Pair Comparison
Compare spread costs across 20+ currency pairs in one table to find the most cost-effective pairs to trade.
All Lot Sizes Supported
Calculate costs for standard, mini, and micro lots with fractional lot support for precise position sizing.