Orders may open with a negative floating profit (equity) due to the spread cost included in the order. Spread is the difference in pip size between a trading instrument's bid price and ask price. Simply put, the spread is the cost of an executed order and is included as floating loss when the order is opened.

How spread is calculated

You place a buy order on a Standard account with a leverage of 1:2000 for 5 lots of EURUSD at an opening price of 1.04620/1.04630 and close the position at 1.04680/1.04690.

In this example, this is how spread is calculated:

• Spread = (ask price - bid price) / pip size (1.04630 - 1.04620) / 0.0001 = 1 pip
• Pip value = lot × contract size × pip size (5 × 100 000 × 0.0001) =  50 USD

Pip value can easily be calculated with our trading calculator.

Cost of spread = spread in pips × pip value = 1 × 50 =  50 USD

The cost of spread is USD 50, therefore this order would open with a negative floating profit of -50 USD.

Learn more about spread for other examples.