What Is Spread in Forex? The Bid-Ask Gap, Costed in Ringgit
The spread is the gap between the bid and ask price, paid on every trade. What 1, 2 and 3 pips cost in ringgit, from the ECB's 16 October 2026 rates.
The spread in forex is the gap between the bid price, at which you can sell a currency pair, and the ask price, at which you can buy it, measured in pips. You pay it once, on opening: you buy at the ask, and could sell straight back only at the lower bid.
The definition is evergreen; the only dated element is the ringgit table, built on the European Central Bank’s reference rates for 16 October 2026.
What is spread in forex, and who pays it?
Take an illustrative EUR/USD quote of 1.1251/1.1253. Buy at 1.1253, sell at once at 1.1251: the 0.0002 gap is two pips, a toll at the border crossing, paid before the market moves.
It is not always the whole cost: some accounts add commission, and overnight positions can carry swaps.
How to calculate the spread in forex
Subtract the bid from the ask, then count pips: the fourth decimal on most pairs, the second on yen pairs. Then multiply by the pip value for your trade size, as our pip explainer works step by step.
What a spread costs in ringgit
The ECB’s reference-rate page, read on 19 October 2026, carried the 16 October set against the euro: US dollar 1.1253, Japanese yen 177.82, Malaysian ringgit 4.5929. This desk derived USD/MYR as 4.5929 ÷ 1.1253 = 4.0815. Ringgit per yen is 4.5929 ÷ 177.82; a standard lot is 100,000 units.
| Pair | Pip, standard lot | 1-pip spread | 2-pip spread | 3-pip spread |
|---|---|---|---|---|
| EUR/USD, GBP/USD | $10 | RM40.81 | RM81.63 | RM122.44 |
| USD/JPY | ¥1,000 | RM25.83 | RM51.66 | RM77.49 |
| USD/MYR | RM10 | RM10.00 | RM20.00 | RM30.00 |
A mini lot (10,000 units) costs a tenth of each figure and a micro lot (1,000) a hundredth: two pips on EUR/USD is RM8.16 on a mini, RM0.82 on a micro. The spreads are illustrative round numbers, not broker quotes.
The ECB says its rates are for information purposes only and strongly discourages using them for transactions; they are not Bank Negara Malaysia rates. The pip post’s RM40.83 used the 14 October set.
Why do spreads widen?
IG’s spread explainer says spreads are likely to be wide when a market is volatile and not very liquid, and can change around major news.
A platform advertising tight spreads is making a price claim, not a licence claim. Whether it may lawfully serve a Malaysian resident is covered in whether forex trading is legal in Malaysia and how to read a licence claim.
Questions readers ask
What is the spread in forex?
The spread is the difference between the bid, the price at which you can sell a currency pair, and the ask, the price at which you can buy it. It is measured in pips and paid on opening: a position bought at the ask could only be sold straight back at the lower bid.
How is spread calculated?
Subtract the bid from the ask and count the pips: 1.1251/1.1253 gives 0.0002, or two pips. Then multiply by the pip value for your trade size: two pips on a standard EUR/USD lot is $20, or RM81.63 at the ECB’s 16 October 2026 rates.
How do forex spreads affect your trading strategy?
This desk does not give trade calls. Mechanically, the spread is paid on every round trip, so its cost scales with trade count and lot size: ten round trips of one standard EUR/USD lot at two pips cost RM816.30 at the 16 October 2026 rates, before any commission or swap.
A two-pip spread looks small on a quote screen and less small in ringgit, with losses on top; check a broker’s local status first, and read nothing here as a reason to trade.