A SPREAD is the difference between the ASK PRICE and the BID PRICE.
For example, if the EURUSD (Euro to U.S Dollar) is trading with an ask price of 1.14010 and a bid price of 1.14000,
then the SPREAD will be the ASK PRICE minus the BID PRICE.
In this case, 0.0001. So a SPREAD of 0.0001 is equal to 1 pip.
For yen-based currencies like USDJPY (U.S Dollar Japanese Yen), the SPREAD is again the difference between the ASK and the BID PRICE.
So, if the Japanese yen to U.S. Dollar is trading with an ask price of 120.420 and a bid price of 120.400, then the SPREAD will be 0.02.
In this case, the SPREAD of 0.02 is equal to 2 pips.
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