Spreads

The spread is essentially the cost of trading which you must overcome in order to reach profitability on a market position.
If the market moves in a favorable direction for your trade beyond the spread range, your market position will be in profit. On the other hand, if the market moves in the opposite direction beyond the spread range, your position will be a loss. Also, even if the market moves in your favorable direction, if it does not exceed the spread range, you will still have a losing position.

As you can see, the smaller the spread, the lower the trading costs will be. Also, you may want to take into consideration other trading costs.

Some brokers will charge commissions or possibly a blend of a spread and commissions for some CFD markets. At AlfaTrade, we offer tight spreads on a wide choice of financial assets.

You should be aware that the range of the spread is influenced by a variety of factors such as volatility, how large your investment is, and which market you are trading. Usually, the more liquid a market is, the lower the spread tends to be. Larger spreads are generally indicative of heightened volatility and low liquidity.