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Indices spreads

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Indices spreads

Indices spreads refer to the difference between the bid price and the ask price of an index, such as the S&P 500 or the Dow Jones Industrial Average. The bid price is the price at which a trader can sell the index, while the ask price is the price at which they can buy it. The spread represents the cost of trading and can vary depending on market conditions, liquidity, and the broker's fees. A narrower spread typically indicates a more liquid market and lower trading costs, while a wider spread can result in higher transaction costs for traders.

Types of forex trading

Fixed Spread:

In this type, the difference between the bid and ask prices remains constant regardless of market conditions. This provides traders with predictable trading costs but may widen during periods of high volatility.

Variable Spread:

Also known as floating spread, this type fluctuates based on market conditions. During times of high liquidity, the spread tends to be narrower, offering lower trading costs. However, it can widen significantly during volatile market conditions, increasing trading expenses for traders.

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