Why mid-market is not the rate you'll get.
The bid-ask spread is the difference between the price at which the market buys (bid) and sells (ask). Every real transaction crosses one side or the other, and the cost is rarely disclosed cleanly.
Mid-market, bid, and ask
The mid-market rate is the midpoint between the bid and the ask — it is a reference, not a tradeable price. A market-maker quotes a bid (the price at which it will buy from you) and a higher ask (the price at which it will sell to you). The difference is the spread, and the spread is the market-maker's compensation for inventory risk.
kefinance.xyz publishes mid-market rates because they are the most defensible reference. Any retail transaction you actually execute will be priced at one side or the other.
Spread, expressed in pips
For most currency pairs, a pip is the fourth decimal place: EUR/USD 1.0776 → 1.0777 is a 1-pip move. For yen pairs, the convention is the second decimal: USD/JPY 154.20 → 154.21 is 1 pip.
A 5-pip spread on a EUR/USD trade means the market-maker has built 0.05% of the trade value into the round-trip. For a €10,000 transaction that's €5; for €1,000,000 it's €500.
Why retail spreads are so much wider
Three reasons:
- Volume. Interbank trades are typically €5m+; retail trades are €1k. Per-trade fixed costs (settlement, KYC, system processing) are absorbed by retail volume only at much wider spreads.
- Information asymmetry. Retail flow is uninformed; corporate and interbank flow signals real economic exposure. Market-makers price the spread to reflect adverse selection risk.
- Disclosure incentives. Retail platforms compete on visible fees; the spread is the largest component of total cost but the least visible. “No fee” FX is almost universally a wider-spread product.
Total cost = spread + commission + fee
Three components combine to give the all-in cost:
- Spread. The bid-ask difference applied to your direction.
- Commission. An explicit per-trade fee, often visible.
- Fee. Transfer fee, FX-conversion fee on a card, or wire fee. Usually disclosed but sometimes buried.
A platform advertising “0% commission, no fees” is recovering all three components in a wider spread. The mid-market rate is the only fixed reference; comparing the rate you're offered to mid-market is the only way to evaluate true cost.
Reference: typical spreads by venue
| Venue | Typical spread (EUR/USD) | % cost on €10,000 |
|---|---|---|
| Interbank (EBS, Reuters) | 0.5–1 pip | ~€0.50 |
| Tier-1 bank corporate desk | 2–5 pips | €2–5 |
| Specialist money-transfer (Wise, Revolut Pro) | 5–20 pips | €5–20 |
| Retail FX broker (CFD platform) | 10–30 pips | €10–30 |
| High-street bank wire | 100–250 pips | €100–250 |
| Bank-issued debit card abroad | 200–400 pips | €200–400 |
| Airport currency kiosk | 500–1,000 pips | €500–1,000 |
How to evaluate a quote
Use this site's converter to find the mid-market rate. Compare it to the rate the platform offers. The percentage difference is the round-trip cost. For €10,000+ transactions, a difference greater than 1.5% is excessive in most currency pairs.