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Dunn To PerfectionFoundation

Gold Trading & XAU/USD · Module 1: Market Mechanics · Lesson 5

Spreads as a Cost

Intermediate 6 minLesson 5 of 15

Learning objectives

  • Explain spreads as a cost in plain language
  • Understand why it matters to markets
  • Recognise a common misconception

The concept

The is a transaction cost paid on every round trip. Frequent trading multiplies it.

Why it matters

Small costs compound. Ten trades a day with a 0.30 spread add up quickly relative to small targets.

How markets interpret it

Spreads widen around news, rollovers, and illiquid hours.

Key takeaways

  • Spread is paid on every trade.
  • More trades = more cost.

Knowledge check

'Zero commission' platforms…

Key terms · hover or tap for a definition

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