Full Explanation
In currency trading, the bid price is what buyers will pay for a currency, and the ask price is what sellers want. The spread is the difference between these two prices. This spread is how market makers and payment providers make profit. A tighter spread (smaller difference) is better for you. For example, if USD/EUR bid is 0.85 and ask is 0.86, the spread is 0.01 (1 cent).
Frequently Asked Questions
For major pairs, 0.3-0.8 pips is tight. For exotics, 1-2% spread is typical.
Spread is essentially the FX cost to you. Tighter spread = better rate = less you pay.
Most consumer providers can't offer mid-market. Woalet gets very close for institutional clients.
Yes, spreads widen during volatile markets and when markets are closed.