The bid-ask spread is the gap between the highest readily available buying price and the lowest readily available selling price.
A trader buying at the ask and immediately selling at the bid would start with a loss approximately equal to the spread, before any other fees or market movement.
How it works
- 1. Read the current bid.
- 2. Read the current ask.
- 3. Subtract bid from ask to get the absolute spread.
- 4. Divide by a reference price to express it as a percentage if useful.
- 5. Include spread when evaluating short-duration targets.
What matters most
- Liquid markets often have tighter spreads than thin markets.
- Spread can widen during volatility.
- Different data sources may show different executable prices.
- Very short scalps are particularly sensitive to spread.
Practical example
A bid of 99.90 and ask of 100.10 has a spread of 0.20. A market buy at 100.10 would need the bid to rise above 100.10 before the position is positive before other costs.
Common mistakes to avoid
- Looking only at the candle close.
- Ignoring the ask on buys or the bid on sells.
- Assuming spread is fixed.
- Setting targets that are barely larger than normal spread.
Using this on Chaintreda
Chaintreda Trade displays live bid, ask and spread alongside the trading controls so protection levels can be evaluated against executable prices.
Related markets
Frequently asked questions
Why does a trade start negative?
One reason is the bid-ask spread: a newly opened position may need price to move favorably before the executable exit price exceeds the entry cost.
Can spread change?
Yes. Spread can vary with liquidity and volatility.
Is spread the same as a trading fee?
No. Spread is a market-price difference; a platform may also have other charges depending on the product.
Continue learning
Risk note: This material is educational and does not constitute investment advice. Trading and digital-asset activity can result in losses. Use appropriate risk controls and only commit funds you can afford to lose.