1. Money

Variable Spread

From , former About.com Guide

Definition:

A variable spread is a spread that is not constant in value. A variable spread will condense and widen as market conditions and liquidity change. When the forex markets get volatile, a variable spread will get larger. If the spreads are normally 2 pips on a pair, and suddenly there is a large buying spree on that pair, the spreads would "widen" to something like 5 pips.

The larger spread helps to protect the broker from losing money if there is a delay between the time you clear the order with your broker and the time they clear it on the interbank market.

  1. About.com
  2. Money
  3. Forex Trading
  4. Forex Glossary
  5. Variable Spread - What is a Variable Spread

©2013 About.com. All rights reserved.