This article explains what 'Spread', "Pip", "Tick" & "Lot Size" are?
- Spread - The spread is the difference between a broker's sell rate and buy rate– the BID and the ASK price in market quotes when exchanging or trading.
The ASK price applies to a BUY order, and the BID price applies to a SELL order.
For example: If the BID price is 1.07987 and the ASK price is 1.07998, the difference between the two is the spread (0.0011), which is written in the platform as 11 points (1.1 pips).
Blueberry believes we have some of the tightest spreads in the industry. Our normal dealing spreads are between 1 and 3 pips for the major currency pairs.
- Pip– A Pip represents the change in value between two currencies.
For example: If the GBP/USD moves from 1.3350 to 1.3351, it has moved by 0.0001 or one Pip (1.3351 – 1.3350 = 0.0001). - Tick– is the smallest increment an individual instrument can move. It is like a pip but may not measure every increment equally.
For example: A tick on one instrument may be measured in increments of 0.0001, whereas another instrument may be measured in increments of 0.25.
- A Point is a shift in the dollar amount.
For example: If a share price went from $35 to $40, traders would say it has moved 5 points. For FX, a point is used to refer to the 5th decimal place.
Please note: On the MT4 platform, spreads are shown in Points. 1 pip is equivalent to 10 points.
How Spread Differs Between a Standard and a Direct Account
Our Direct account is a reduction of 1 pip off all the Standard spreads. This means that if the spread for any given pair on a Standard account is at 1 pip, it would be 0 pip for Direct.
However, note that the reduced spreads on the Direct account apply only to forex and XAUUSD (Gold - US Dollar). Spreads on any other instruments would be the same for both Standard and Direct accounts.
Additionally, Direct accounts have commissions which are at about $7 per round turn trade and are quite cheap. The commission varies depending on the account's currency and the current day's exchange rates, i.e. 4 GBP, 5 EUR, 7 SGD.