Forex glossary
Variable spread
A variable spread is an ask-bid difference that changes with quotes and provider rules. Liquidity, available quantity and uncertainty can influence its width. An ECN, STP or market-maker label alone establishes neither the spread amount nor the total trading cost.
Illustrative example
How does it work in practice?
Suppose a hypothetical EUR/USD spread rises from one to four pips before an order. For 10,000 EUR and a 0.0001 pip, immediate round-trip price cost rises from 1 to 4 USD before other fees.
A case to work through
Unchanged bid, higher ask
EUR/USD model: bid 1.1000; ask changes from 1.1001 to 1.1004; pip 0.0001.
- Spread widens from 1 to 4 pips.
- No trade is given, so the quotes do not establish incurred slippage.
What follows? Record time and both quote sides.
Example boundary: These hypothetical quotes do not guarantee available quantity.
A useful distinction
Variable spread / Slippage
Slippage compares plan with fill; variable spread compares contemporaneous bid and ask.
Check your understanding
Read spread width as quotes change.
Show the answer and explanation
3 pips
0.0003 / 0.0001 = 3.
Orders, prices and execution quality
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Related terms
Sources and documentation
- MetaTrader 5: basic trading principles
Orders, deals and positions; FOK, IOC and partial-filling policies.
Document read: - MetaTrader 5: Market Watch
Symbol specifications define contract size, volume constraints, margin calculation, execution rules and the commission charging model.
Document read:
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.