Forex Basics

The Spread is the difference between the Ask and the Bid price.

 For example, if the EURUSD is trading at the exchange rates of 1.13090 and 1.13000, then the spread is equal to the Ask minus the Bid price:

Spread = Ask Price – Bid Price

One point thirteen zero nine minus one point thirteen

Spread =1.13060 – 1.13000

The difference is zero point zero zero zero six or 6pips=0.0006 pips

Similarly, if the USDJPY is trading at the exchange rate of 110.190 and 110.100, then the spread is calculated as the difference between the Ask and the Bid price:

Spread = 110.190 – 110.100

One hundred ten point nineteen minus one hundred ten point one

The difference is zero point, zero nine, or nine pips.

=0.09 pips