How to compare spreads
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
A spread is the gap between the buying price and the selling price at the same moment, and it is a real cost of trading. To compare, look at both the buy price and the sell price for the same asset at the same time and note the difference. The figure moves constantly with the time of day and market conditions, so do not judge from a single observation — check repeatedly, at different times.
Key points
- Look at the buy price and the sell price for the same asset at the same moment
- Spreads are not fixed; they change with the time of day and with market conditions
- In the brokerage style the spread is the main cost; on the exchange style, look at the book's bid-ask gap plus fees
- Actual levels differ by operator and move, so confirm them in the official documentation
Definition
The difference between the price at which you can buy and the price at which you can sell at the same moment. Even where trading is advertised as commission-free, this gap is a real cost.
Spreads matter because you start at a loss the moment you buy. If buying and selling prices differ at a given instant, buying and immediately selling back costs you that difference. It exists even where commission is advertised as zero. Judging cost by the headline commission alone misses the larger part of it.
Comparing is simple. For the same asset, at the same moment, note the price on the buy screen and the price on the sell screen, and record the gap. 'At the same moment' is the part that matters — prices taken minutes apart tell you nothing. Screenshots side by side make it reliable. Do this across the operators you are considering, then repeat at different times of day.
The repetition is necessary because spreads are not fixed. They tend to widen when the market is moving violently, during quiet hours, and around major economic releases. One observation at three in the morning does not describe an operator's normal state. Observe during the hours you would actually trade, more than once.
Where to look also depends on the trading format. In the brokerage style, the gap between the operator's quoted buy and sell prices is the spread. On the exchange style, the gap between the best bid and the best ask on the order book plays that role, with trading fees on top. Thin books widen that gap, and large orders make it worse still. See 'bid-ask spread' and 'market depth' in the glossary.
No specific figures appear in this article: they differ by operator, move daily and get revised. The only reliable way to know your real cost is to observe it for the assets and hours you actually use — and to look at the whole picture, including deposit, withdrawal and trading fees. 'How to compare fees' sets out that framework.
Watch out for
- · 'No commission' does not mean 'no spread'. The real cost is in the gap between buying and selling prices
- · Spreads widen when markets move fast, so calm-market observations do not hold
- · This article gives no figures. Confirm actual terms on the official site of the operator you use
Frequently asked questions
Are there times of day when spreads are narrower?
Spreads do tend to be narrower when trading is active, but it varies by asset and operator and is not a rule. Observe it yourself during the hours you trade.