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Trading Math
How to Calculate What the Spread Costs You
The spread is paid once per trade, at the moment of entry, and never shows as a line on the statement. This paper shows you where the cost sits between the two prices, how to work it out at your trade size, what it took from one real trade, and the two columns on your platform that show the same number.
Every symbol has two prices: the ask, the higher one, is where you buy, and the bid, the lower one, is where you sell. The gap between them is the spread, and it is the broker's charge for the trade. At the open of 3 September 2026 the euro against the dollar showed 1.15872 to sell and 1.15881 to buy — a pip is the fourth decimal place, so a gap of 0.9 of a pip. A trade bought at 1.15881 is worth 1.15872 the second it opens, because that is the price it could be closed at. The gap is already gone. That is the whole cost, and it is paid once, on the way in.
The same gap at three sizes
The sum is the spread in pips, times the value of a pip at your size, times the lots — and the middle term is the one that scales. A pip on the euro against the dollar is a dollar at a tenth of a lot and ten dollars at a full lot. So 0.9 of a pip costs ninety cents on a tenth of a lot, nine dollars on a lot, and $22.50 on two and a half lots. The gap on the screen is the same number in every case; the size of the trade sets what it costs.
