Written By: Patrick Wieland

Ever hit the perfect setup but still walk away with a tiny profit — or worse, a loss? The real issue might be hiding in plain sight: the spread.

In futures trading, the spread is the difference between what buyers are willing to pay (the bid) and what sellers want to receive (the ask). It’s a silent cost baked into every trade — especially dangerous during prop firm evaluations where every tick matters.

Let’s break down exactly what is spread in futures trading, how it impacts your results, and how to stop it from draining your account.

What Is a Spread in Futures Trading?

The spread is the gap between the highest price a buyer will pay for a futures contract and the lowest price a seller will accept. Think of it like the price difference when exchanging currency or buying a used car — there’s always a markup.

In futures trading, this spread is present on every trade. If you’re just starting out, check out this guide from NerdWallet on how futures trading works to build a solid foundation before jumping in. It’s baked into your entries and exits and plays a huge role in your total trading costs.

Understanding Bid vs. Ask Price

• Bid Price = what a buyer is willing to pay
• Ask Price = what a seller wants to receive

Example:

• Bid: 4510.25
• Ask: 4510.50
• Spread = 0.25 points (or $12.50 on the ES contract)

This spread exists in every futures market — ES (S&P 500 E-mini), NQ (Nasdaq), CL (Crude Oil), and so on.

Spread Example with Real Contracts

Let’s look at the ES (E-mini S&P 500) on a Depth of Market (DOM) screen like this example:

• Tight Market: Bid 4510.25 / Ask 4510.50 — 1-tick spread
• Wide Market: Bid 4509.75 / Ask 4510.75 — 4-tick spread

Factors that affect spread size:

• News events (CPI, FOMC)
• Time of day (market open, lunch hours, close)
• Liquidity (lower during holidays or after hours)

Tighter spreads mean better fills. Wider spreads = more risk and potential loss.

How Spreads Impact Entry and Exit

Here’s the kicker: when you buy a contract, you enter at the ask. When you sell, you exit at the bid.

That means:

• You lose the spread instantly when entering and exiting a trade.
• Example: Enter at 4510.50 (ask), sell at 4510.25 (bid) — you lose 1 tick or $12.50.

Even if your strategy nails the direction, the spread can still drag you into the red — unless you account for it

Why Spreads Matter for Futures Traders

Spreads are the invisible cost that most new traders ignore — and it adds up fast.

Spreads as Trading Costs

Think of spreads like a hidden fee you pay every single time you trade.

Let’s say you make 100 trades:

• 1-tick spread x 100 trades = $1,250 in hidden costs (ES contract)
• 2-tick spread? That’s $2,500 gone before you’ve even started to win.

And that’s before commissions.

Slippage: The Silent Account Killer

Slippage happens when your order gets filled at a worse price than expected.

Why it matters:

• Poor execution + wide spreads = unexpected losses
• In a prop firm challenge, even small slippage can be the difference between passing and blowing the account

Example: You try to buy at 4510.50 but get filled at 4510.75 — you’re already down more than you planned.