Spread and Swap Concepts

What Is Spread?

Spread is the difference between the buy price (Ask) and the sell price (Bid). As one of the key components of trading cost, spread can vary depending on market conditions and the product being traded.

Spread levels can vary by product, liquidity, market volatility, and trading hours. Spreads can widen in particular during major economic data releases.

What Is Swap?

Swap is the overnight carrying cost or credit that may be applied to an account when an open position is carried over to the next trading day at the end of the trading day.

The swap amount can vary depending on the product traded, position direction, position size, and market conditions. Swap is not applied unless a position remains open at the end of the day.

Is Commission Charged?

Commission terms can vary depending on the account type chosen and the product traded. On some accounts, trading cost is built entirely into the spread, while other account types may also apply a separate commission.

Current commission and trading terms can be reviewed in the account features section.

What to Consider When Evaluating Trading Costs

When evaluating the total cost of a trade, it's not enough to look at spread alone — the swap effect from how long a position stays open, plus any applicable commission, should be factored in as well. For short-term trades, spread tends to be the more decisive cost factor, while for longer-held open positions, swap can matter more.