The spread is the difference between the buy and sell price of an asset on our platform. It represents a key trading cost that’s reflected in your profit and loss (P&L) as soon as you open a position.
How does the spread work?
You’ll always see two prices for each asset:
- Buy price (the higher price) – used when you open a buy (long) position, or close a sell (short) position
- Sell price (the lower price) – used when you open a sell (short) position or close a buy (long) position
The difference between these two prices is the spread.
When you open a position, you’re quoted the relevant price – but your P&L is calculated using the opposite price (ie the one you'd close at). That’s why you’ll see an immediate unrealised loss, even if the market hasn’t moved.
In effect, the full spread appears upfront in your open (unrealised) P&L – even though only half is priced in when you enter, and the other half would apply if and when you close. This means your account shows the cost immediately, but it remains unrealised until you actually close the trade.
Example: opening a buy position
Let’s say:
- Buy price: $100
- Sell price: $98
- Spread: $2
You open a position on 10 CFDs, with a notional trade size of $1,000 (100 X 10).
If you close that position straight away, you'd do so at the sell price of $98:
$98 × 10 = $980
That’s a $20 loss to your open P&L, even though the market hasn’t moved. This unrealised loss is due to the spread.
Although only half the spread is priced in when you open the trade, your P&L is calculated using the current exit price. That’s why your open (unrealised) P&L immediately shows the full $20 loss – even though you haven’t closed the trade yet. This is simply the cost of the spread, and it would only become a realised loss if you closed at that point.
What happens if the spread changes?
If the spread widens while your trade is open, the gap between your entry and exit prices increases – even if the market price hasn’t changed.
This can cause your open (unrealised) loss to grow, even without market movement – because if you were to close the position, you’d do so at a less favourable price. On the other hand, if the spread narrows, your open P&L may improve.