Spread
Execution
Spread is the gap between bid and ask price. Tighter spreads reduce transaction costs.
Spread is the difference between the highest bid and lowest ask price of an instrument. For prop traders, spread is a direct cost — every trade pays the spread on entry plus commission, and sometimes pays it again on exit if held through changing liquidity conditions.
Forex prop firms quote either fixed spreads (predictable but typically wider) or variable spreads (tighter on average but expand around news). Futures and equities operate on visible bid-ask spreads that vary by instrument and liquidity.
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