When trading cryptocurrency on Digital Surge, it's important to understand the concept of spread, as it directly affects the price at which you can buy or sell an asset.
What is a Spread?
A spread is the difference between the buy price and the sell price of a cryptocurrency at any given time. This gap is common in all financial markets and represents the cost of accessing a trading opportunity.
For example, if Bitcoin is listed with a buy price of $90,000 and a sell price of $89,000, the spread is $1,000. This represents a spread of approximately 1.11%.
When trading cryptocurrency, it’s not uncommon to encounter spreads ranging from 0.5% to 3%, depending on the asset and market conditions.
Spread vs. Trading Fee
The spread is separate from the trading fee, which is a set percentage applied to each transaction. While the trading fee is calculated on top of your order, the spread is included in the difference between the displayed buy and sell prices.
Both should be considered when assessing the overall cost of a trade.
Why Does Spread Exist?
Spreads exist for several reasons, including:
Liquidity: More liquid assets (those with high market activity) typically have smaller spreads.
Volume: Higher trading volume can result in tighter spreads.
Volatility: Assets with significant price swings tend to have wider spreads.
Market Conditions: Spreads can fluctuate during periods of low activity or high uncertainty.
How Spreads Work on Digital Surge
On Digital Surge, the buy and sell prices you see on the platform represent the prices available for you to trade at. These prices incorporate the spread at that moment, which is determined based on a range of factors, including asset liquidity, market activity, and trading conditions.
Since market conditions constantly evolve, the spread may vary depending on when you choose to trade.
If you have any questions or feedback, please reach out to us at contact@digitalsurge.com.au or use our live chat. We're here to help.