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What Is a Currency Spread?

If you have read that a provider makes money on the "spread", here is what that actually means and why it matters more than any advertised fee.

Buy price, sell price, and the gap between them

At any moment a currency has two prices: the rate at which a provider will buy it from you, and the slightly higher rate at which they will sell it to you. The difference between those two is the spread. The midpoint between them is the mid-market rate — the fair reference value.

Why the spread is the real cost

Because the spread is built into the exchange rate rather than charged as a separate line, it is easy to miss. A provider can advertise "0% commission" or "no fees" and still earn a healthy margin purely by quoting you a rate a few percent away from mid-market. That is why comparing only headline fees is misleading — the spread can dwarf any fee.

Tight vs wide spreads

Heavily traded pairs like EUR/USD or GBP/USD usually have tighter spreads because the market is deep and liquid. Exotic or thinly traded currencies carry wider spreads. Spreads also widen at weekends and during volatile periods, when providers protect themselves against fast-moving prices.

How to measure it

To see a provider's spread, compare the rate they quote you against the live mid-market rate. Express the gap as a percentage and you have the true cost of the transaction — the single most useful number when choosing where to exchange. Our converter shows the mid-market benchmark so you always have something to measure against.

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FAQ
Is the spread the same as a fee?
No. A fee is a separate charge; the spread is built into the exchange rate itself. A provider can have no fee but a wide spread, which can cost more.
Which currencies have the tightest spreads?
Heavily traded major pairs like EUR/USD and GBP/USD, because the market is deep and liquid. Exotic currencies carry wider spreads.
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