Recently, I noticed an interesting thing about what spread fees are that many new traders still don't fully understand. In early 2026, when SJC gold surged to 180 million VND per tael, the buy-sell difference (spread) was pushed up to 3 million VND per tael. That means, right after you buy, you've already "lost" about 1.6% of your capital. That’s why understanding what spread fees are is so important.

Actually, spread isn't complicated. It’s simply the difference between the buy price (Ask) and the sell price (Bid) of an asset at the same moment. Every time you execute a trade, you have to "pay" this difference to the broker. In the physical gold market, spreads are large due to storage and transportation costs. But on CFD/Forex trading platforms, spreads are significantly smaller thanks to enormous global liquidity.

I once encountered this situation: opening a BUY order on the EUR/USD pair when the spread was only 1.5 pips, but as soon as the order was filled, the account showed a negative balance. That’s the spread "eating into" your potential profit. If you're a scalper (short-term trader), a high spread can "swallow" all your small gains.

The calculation of spread fee is simple: Spread = Ask Price – Bid Price. For example, if the current world gold bid is $4,490.50/oz and ask is $4,491.00/oz, then the spread is $0.50 or 50 pips. If you trade 1 lot (100 oz), your immediate cost is $50.

There are two types of spreads you need to know. Fixed spread always stays the same, making it easy to calculate but usually higher than the market average. Floating spread varies every second based on liquidity, which can be extremely low during stable market conditions but widens during major news events. I usually choose floating because most of the time it’s cheaper.

Why does the spread sometimes "widen"? Three main reasons: first, poor liquidity (often during the 5 AM trading session or holidays). Second, high volatility—when geopolitical events occur or markets fluctuate wildly, brokers widen spreads to protect themselves. Third, economic news—before CPI releases or Fed rate decisions, liquidity providers often withdraw, causing spreads to widen.

A common misconception: "Zero spread" doesn’t really mean zero. When a platform advertises zero spread, they often charge a commission instead, around $7-10 per lot. So, you need to calculate: a standard account with a 1.5 pip spread (about $15 per lot) versus an ECN account with a 0.1 pip spread + $7 commission (total $8). If you trade frequently, ECN might be cheaper.

I also realize a "trap" many new traders fall into. The chart on MT4/MT5 only shows the Bid price (buy price). But your buy order executes at the Ask price (always higher by the spread). So, if you set a stop loss at 1.1000 and the chart only hits 1.0998, your order could still be stopped out because the Ask price at that moment was already 1.1000. The tip is to always add the spread to your stop loss level to ensure safety.

To optimize spread, I prefer trading during the European session or early US session (14:00-22:00 Vietnam time) when liquidity is highest. Avoid trading at 4-6 AM when spreads widen most. If you're a scalper, choosing a broker with low spreads and fast order execution is essential. Also, always monitor economic calendars to know when red news is coming—it's better to close positions or avoid opening new ones then, as spreads can spike.

Quick comparison: SJC gold bars have a spread of about 3 million VND per tael (impacting 1.6-2%), real estate 2-5%, Vietnamese stocks 0.1-0.2%, but gold trading on CFD platforms only about $0.50/oz (impacting 0.02%). That’s why many people switch to digital financial trading instead of physical gold.

In the crypto market, the story is different. Major centralized exchanges have very small spreads for top coins (BTC, ETH) thanks to huge liquidity. But on decentralized exchanges (DEX), spread turns into "slippage." When you buy a large amount of coins from a small pool, the price gets pushed up much higher than the displayed price. I once bought a new token on a DEX, the displayed price was $1, but in reality, I had to buy at $1.05—this hidden "spread" of 5% hurts. So, when swapping, always check the slippage tolerance setting beforehand.

Conclusion: what is spread fee? It’s a direct trading cost, always present and "eating into" your profits. You can’t eliminate it completely, but you can control it by choosing the right timing, the right platform, and understanding how order matching works. Successful traders aren’t those who avoid spread, but those who know how to live with it.