How Can a Trader Calculate the Effective Spread for a Filled Order? ▴ Learn

How Can a Trader Calculate the Effective Spread for a Filled Order?

The effective spread for a filled order is calculated as: $2 times | text{Execution Price} – text{Mid-Price} |$. The mid-price is the average of the best bid and best offer at the time the order was submitted.

This calculation measures the total cost of the trade relative to the prevailing market price, including any slippage or price impact incurred during execution.

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