Algo Trading School

Spread

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At any moment a broker quotes two prices: the bid (what you can sell at) and the ask (what you can buy at). The gap is the spread. Every position starts underwater by the spread, which makes it the most reliable cost in trading — charged on every single trade.

Spreads widen when liquidity is thin: around major news, at session rollover, on holidays. Strategies with small profit targets are disproportionately sensitive to spread, which is why realistic spread assumptions matter so much in backtests.

Covered in depth in Lesson 12: A-book, B-book: lo que hace su corredor con su pedido.

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Lecciones ocasionales y en lenguaje claro sobre trading automatizado — el mismo tono que todo en este sitio. Sin señales, sin promesas; date de baja cuando quieras.

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