Direct answer
Spread by session is the idea that the forex spread—the difference between the bid and ask prices quoted for an instrument—can vary depending on which trading session is active (for example, when one regional market is open and liquidity is higher or lower). The term emphasizes that spread is not always constant through the day; it may change with time-of-day conditions.
Mechanism and definition
A forex quote usually includes two prices: the bid (what you can sell at) and the ask (what you can buy at). The spread is the gap between those two. When someone says “spread by session,” they are describing a time-based variation in that bid-ask gap.
The key point is that trading sessions tend to overlap differently across regions. During higher-liquidity hours, more participants may be quoting, which can make the order book deeper and typically compress the spread. During quieter hours, fewer orders may be present, which can make the spread wider.
It is also common to separate stable mechanics from variable conditions:
- Stable mechanics: spread is still the bid-ask difference, measured at the moment a quote is presented.
- Variable conditions: liquidity, volatility, and the speed at which quotes can be updated can differ across sessions.
A simple numerical example (with assumptions)
Assume a currency pair has a quoted bid/ask spread of 0.7 pips during one session. Later, during a lower-liquidity period, the spread widens to 1.4 pips. If you execute a trade at the quoted ask (for a buy), the additional “cost” from spread is effectively related to how wide that bid-ask gap is at the time of execution. This example is illustrative: the exact numbers depend on market conditions and provider quoting.
Evidence or example: distinguishing adjacent concepts
Spread by session is related to, but not the same as, several nearby ideas:
- Average spread vs. spread by session: An average spread mixes different hours together. “Spread by session” focuses on time-of-day differences.
- Commission vs. spread: Some setups charge both a spread component and a separate commission. Spread by session usually describes the bid-ask component, not the full all-in cost.
- Slippage vs. spread: Slippage is the difference between an intended execution price and the actual fill price. Spread by session describes the quoted bid-ask gap; slippage depends on execution quality and market movement between quote and fill.
Limitations and risks (what can fail)
Because this concept is about conditions that change through time, several limitations matter:
- Not all “session” labels are the same. Different platforms can define session boundaries differently, so “by session” comparisons may not line up.
- Spreads can move within a session. Even if a provider groups quotes by session, the spread can still widen or tighten during that period due to volatility spikes or temporary liquidity gaps.
- Provider quotes can differ. Two providers may display different spreads at the same time because they source liquidity differently and apply different execution/quoting models.
- Historical patterns are uncertain. A spread that tends to be narrower in one session historically does not guarantee it will be narrower in the future.
Verification and next question
To verify “spread by session” in practice, focus on observable, non-promotional measurements you can reproduce: compare bid-ask spreads at different times of day using the same instrument and measure the variation across your chosen session boundaries. If you want to go deeper, the most useful next question is: how does spread by session work in forex, and how can it change during volatile markets?