"Spread": the smallest floating unit. When the exchange rate changes, the difference in point fluctuations is the "spread".
"Point": In order to express the exchange rate accurately and conveniently, it is generally expressed with 5 digits. The unit of the smallest change is usually called "point".
For example, the minimum unit of the US dollar Japanese yen (USDJPY) quotation of 120.00 is 0.01 yen, or 0.01 yen is 1 point. The smallest unit of the British pound dollar (GBPUSD) quotation of 0.9800 is 0.0001 US dollars, or 0.0001 US dollars is 1 point.
Quotation spread: When trading foreign exchange, there is a difference between the buying price and the selling price. For example: when the US dollar Japanese yen (USDJPY) quotes 120.00/120.10, 120.00 is the selling price in US dollars, and 120.10 is the buying price. When entering the US dollar price, 120.10-120.00=0.10 is called the spread of 10 points. When GBPJPY quotes 185.50/185.60, the spread is 10 points.
Extended information:
Floating spread: This means that the fees charged by traders change based on market fluctuations. Taking the euro as an example, when the overall market trading is relatively flat, the euro's spreads are lower. Under normal circumstances, the euro spread fluctuates between 2-4 points. When the market encounters a major market situation, the euro spread may fluctuate to 4-6 points.
Based on years of statistics and analysis, the euro spread on the FXCM platform is normally around 3 points; the spreads on pounds and yen are around 2-5, with an average of 4 points; and the gold spread is around 2-6 Floating, with an average of 5 points. Global Jinhui.com investment experts said that if you want to reduce your transaction costs, you can choose to trade when the spread is relatively low, which is also beneficial to your operation when the market conditions are relatively flat.
Fixed spread: This means that no matter whether the market situation is flat or violently fluctuating, the spread will not be affected. For example, the FXSOL spread is 3 pips for the euro and 4 pips for the yen and pound. Fixed spreads are higher than floating spreads.
Reference: Baidu Encyclopedia-Spread