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How is a spread with InstaFutures contacts formed?

A spread is the difference between the buy price or the ask and the sell price or the bid. The bid price is always slightly lower than the ask price. In the case of InstaFutures, a spread is formed by market participants as a natural difference between the best buy and sell offers.

A spread exists because the buyers and the seller are not ready to give in to each other and do not insist on an immediate purchase or a sale. This is the rock-solid principle of trading on exchanges that will be true forever. InstaForex does not charge any spread and does not interfere in its formation.

Let’s figure out how a spread is formed.

Imagine that one trader wants to buy 1 lot of EUR/USD InstaFutures at the price of 0.6525. For this, he sets a buy limit order at this level. This is how the bid price is formed, i.e. someone can make a sell deal with the size of up to 1 lot at this price. Another trader wants to sell 1 lot of EUR/USD InstaFutures but thinks that the price of 0.6525 is too high. So, he sets a sell limit order at 0.6550. This is how the ask price appears. In other words, someone can make a buy deal with the size of up to 1 lot.

To sum up, the current market quote of InstaFutures is 0.6525/6550, so a spread equals 25 pips.


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