Generally, the spread of a security is the difference between its Buy (ask) and its Sell (bid) prices.
The Spread may be set as “Floating” - in this case, it can vary throughout the day depending on the market conditions (volatility and liquidity). Alternatively, the Spread may be set as 'Fixed' for some instruments - it will remain static and unchanged regardless of the market conditions. Currently, all CFD instruments on our platform have their spread set as “Floating”.
Larger shares, currencies, and commodities can have a very tight spread as they are highly liquid markets. Conversely, instruments (eg stocks of small-cap companies with small free float) that don't trade much will have lower liquidity and respectively wider spread.
N.B. The spread of an instrument may widen in times of thinner liquidity and high volatility, such as the market opening or during corporate news or geopolitical events of large scale. In case of a spread widening, the result of an already open position with the instrument will worsen as it is calculated according to the opposite quote of the price responsible for the opening of the position (the Sell quote for long positions and the Buy quote for short positions). In some cases, this can lead to the position’s closure due to insufficient funds.
*You can check the average spread for a given instrument within a predefined period of time on our Trading Instruments page here.