What is a Spread in Trading and How Does it Work at Pivex?

In trading, a spread is the difference between the ask price (the price you buy at) and the bid price (the price you sell at). This difference represents the cost of opening a trade, and it applies to all instruments you trade on the MatchTrader platform at Pivex.

Example:

If EUR/USD is quoted as 1.1052 (ask) / 1.1050 (bid), the spread is 2 pips. This means that as soon as you enter the trade, you’re down 2 pips — the market has to move in your favor by at least 2 pips just to break even.

How It Works on Pivex

At Pivex, spreads are variable (floating), which means they change depending on market conditions such as liquidity and volatility. Spreads can tighten during active sessions (like the London or New York session) and widen during off-hours or high-impact news events.

Spreads are automatically calculated and displayed in the Market Watch section of MatchTrader. You can click on any instrument to see its real-time spread, lot size, swap fees, and other specifications.


Why Spreads Matter

• Direct Trading Cost: The spread is the first “cost” you face on every trade. It’s the gap you must overcome before making a profit.
  
• Impacts Scalpers & Day Traders More: If you’re making short-term trades, even small spreads can significantly affect your bottom line.
  
• Wider Spreads = Higher Risk: During news or volatility spikes, spreads can widen dramatically, impacting trade entries and stop losses.
  
  

Factors That Affect Spreads on Pivex

• Market Volatility: Sudden news events or high-impact economic releases may cause spreads to widen.
  
• Liquidity of the Asset: Highly traded pairs like EUR/USD usually have tighter spreads, while exotic pairs or low-volume assets have wider ones.
  
• Time of Day: Spreads are usually tighter during the overlap of major sessions (London/New York) and wider during low-activity times.
  
• Instrument Type: Forex pairs generally have lower spreads compared to indices or commodities.
  

Tips for Managing Spread Costs
• Check the Spread Before Entering a Trade: In MatchTrader, you can easily view the current spread for each asset.
• Avoid Entering Positions During News Releases: Spreads tend to spike during high-impact economic events. Check the news calendar and plan trades accordingly.
• Adjust Stop-Loss and Take-Profit: Always factor in the spread when setting SL/TP levels, especially if your targets are small.

Final Note

At Pivex, spreads are part of the simulated trading experience designed to reflect real-market conditions. They are not fixed and can vary depending on the instrument and trading session. By learning how spreads affect your trading outcomes, you’ll be better prepared to make informed and strategic decisions.

If you’re ever unsure about a spread or how it’s calculated for a specific instrument, just click into the specifications tab in MatchTrader or reach out to our support team for assistance.