<h2>Underwriting Spread</h2>
<p>The <strong>underwriting spread</strong> is a fee charged by a broker or a dealing desk to facilitate a trade in the forex market. It is the difference between the buy and sell prices of a currency pair, representing the broker's profit from the transaction.</p>

<h2>How It Works</h2>
<p>The underwriting spread is typically expressed in pips (percentage in point), which is the smallest price change that a given exchange rate can make. Here's how it works:</p>
<ul>
  <li>When you buy a currency pair, you do so at the ask price, which includes the underwriting spread.</li>
  <li>When you sell a currency pair, you do so at the bid price, which is the ask price minus the underwriting spread.</li>
</ul>
<p>For example, if the bid price for EUR/USD is 1.18500 and the ask price is 1.18505, the underwriting spread is 0.5 pips.</p>

<h2>Why It Matters for Traders</h2>
<p>The underwriting spread is a crucial aspect of forex trading as it directly impacts your trading costs and profitability. Here's why it matters:</p>
<ul>
  <li><strong>Trading Costs</strong>: The underwriting spread is a key component of your trading costs. A wider spread means higher costs per trade.</li>
  <li><strong>Profitability</strong>: To make a profit, your trade must exceed the underwriting spread. In other words, the price movement must be greater than the spread for you to make a profit.</li>
  <li><strong>Liquidity</strong>: The underwriting spread is often an indicator of market liquidity. Tighter spreads usually indicate higher liquidity, making it easier to enter and exit trades.</li>
</ul>

<h2>Example</h2>
<p>Let's say you're trading EUR/USD with STB Provider, which offers an underwriting spread of 1 pip on this pair. If you buy EUR/USD at the ask price of 1.18505 and the price moves to 1.18515, you would make a profit of 1 pip, excluding any other costs. However, if the price moves to 1.18500, you would incur a loss equal to the underwriting spread.</p>

<h2>Key Takeaways</h2>
<ul>
  <li>The underwriting spread is a fee charged by a broker for facilitating a trade in the forex market.</li>
  <li>It is the difference between the buy and sell prices of a currency pair, usually measured in pips.</li>
  <li>It directly impacts your trading costs and profitability.</li>
  <li>Tighter spreads usually indicate higher market liquidity.</li>
</ul>