Quotes Costs and Cash Flows · CFDs Trading Guide

A chart price is not necessarily a price you can trade. Bid and ask quotes explain why a new CFD position can begin with a small unrealised loss.

Read both sides of the quote

The bid is the price at which you can sell. The ask is the price at which you can buy. Their difference is the spread. A long position opens at the ask and closes at the bid, while a short position does the reverse. Check whether the chart displays a bid, ask, midpoint or reference market price.

Measure the immediate cost

Suppose the quote is 99.90 bid and 100.10 ask. Buying 100 units at 100.10 and immediately selling at an unchanged 99.90 produces a $20 loss before other fees. The spread is $0.20 per unit. It is not $20 at entry plus another $20 at exit when these actual execution prices already include the full difference.

Compare spreads with the intended move

A two point spread consumes a larger share of a five point target than of a 50 point target. Yet holding longer can add funding and event exposure. Evaluate costs against a realistic expected move, not an optimistic best case. Minimum advertised spreads may differ from quotes during thin trading, news releases or a market reopening.

Align triggers and research data

A long position stop may depend on the sell side of the quote, while a short position stop may depend on the buy side. Confirm the provider rule. A stop can trigger when a midpoint chart appears not to touch it. Save both quote sides when investigating execution, and use comparable data when testing a strategy.

Try it yourself

A quote is 250.40 bid and 250.70 ask. You buy 60 units and later sell at a bid of 251.20. Find the price gain. Should you subtract the opening spread again?

Show the worked answer

The gain is 60 × (251.20 minus 250.70) = $30. The execution prices already include the spread effect. Subtract only additional costs that have not already been included.

Further reading

Educational material, not a recommendation to trade. Numerical examples are hypothetical. CFDs involve leverage and substantial risk of loss. Availability, costs and protections depend on the contract, legal entity, jurisdiction and client classification.

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