Spreads across the four asset classes

The bid-ask spread is the price of immediacy — what the market charges you to trade right now instead of waiting. Because you pay it on the way in and again on the way out, it functions as a round-trip toll that no fee schedule mentions. And it is wildly different across markets: the toll on a major currency pair is measured in fractions of a basis point, while the toll on a small-cap coin can run a hundred times that. Trading across asset classes without recalibrating for spread is how a strategy that works in one market quietly bleeds out in another.

On a multi-asset platform like Obsidiate — 99 instruments spanning 50 cryptocurrencies, 30 stocks, 15 forex pairs, and 4 metals — that recalibration is not optional. The same trader, same strategy, same hour can face five distinct liquidity regimes. Here is the map.

Why spreads differ at all

A spread is a market maker’s compensation for two risks: inventory risk (holding the asset while its price moves) and adverse selection (the next trader may know something). Both risks shrink when volume is huge, volatility is moderate, and information is symmetric — so spreads are tightest in enormous, boring markets and widest in small, jumpy, news-driven ones. Every pattern below is just this principle wearing different clothes.

Forex majors: the tightest market on earth

The major pairs — EUR/USD above all — form the deepest market in existence, with trillions in daily turnover. Spreads in majors during liquid hours run from fractions of a pip to about a pip: on the order of a basis point or less of notional. A $100,000 position in a major might pay a couple of dollars in spread. The catch is that this tightness is conditional. Cross pairs and exotics are several times wider, and even majors widen sharply in the dead zone after New York closes and around major economic releases, when makers pull quotes rather than get run over.

Large-cap stocks: tight, but only during the session

Liquid large-cap stocks quote spreads of a cent or two — on a $150 stock, roughly one basis point, competitive with FX. The defining feature is the session: equities trade rich hours, then stop. Liquidity clusters at the open and close, sags midday, and outside regular hours spreads widen severely while depth nearly disappears. The other equity-specific cost is the overnight gap — no spread to cross, because there is no market at all, just a jump from yesterday’s close to today’s open that no resting order can protect you through.

Crypto: BTC and small caps are different planets

Crypto refuses to be one asset class for spread purposes. Bitcoin on liquid venues trades at spreads of a few basis points or better with deep books — execution quality comparable to a liquid stock, available 24/7. A few large-cap coins behave similarly. Then the curve falls off a cliff: mid-caps quote 0.1% to 0.5%, and small-cap coins can show spreads of 1% or more with depth so thin that the quoted spread understates the real cost of any meaningful size. A 1.5% spread is a 1.5% round-trip toll before fees and slippage — a strategy netting 2% per trade in BTC terms is dead on arrival in that instrument.

Metals: gold is liquid, the rest less so

Spot gold is a genuinely deep market — spreads of a few basis points during London and New York hours, comparable to a tight stock. Silver trades noticeably wider and moves more violently relative to its price, and platinum and palladium are thinner still, with spreads that can reach tens of basis points and depth that demands respect from size. All four share FX-style hours: liquid through London and New York, thin through the Asian session, with quote quality that degrades accordingly.

Sessions and overlaps: the global liquidity clock

• London–New York overlap (roughly midday UTC) is peak liquidity for FX and metals — the cheapest hours to trade them.
• US equity hours are the only hours that matter for stocks; open and close carry the deepest books of the day.
• Crypto’s 24/7 clock still has a pulse: spreads widen on weekends and in the gap between New York close and Asia open.
• Around scheduled news, every asset class widens at once — makers pull quotes seconds before releases and restore them after.
• The rule of thumb: trade each instrument when its home market is awake, and assume off-hours quotes are worse than they look.

Key takeaways

• The spread is a round-trip toll: paid on entry and exit, missing from every fee schedule.
• FX majors and large-cap stocks trade at a basis point or two; small-cap crypto can charge a hundred times more.
• BTC trades like a liquid stock; small-cap coins do not — treat them as separate asset classes for execution.
• Gold is deep, silver wider, platinum and palladium thinner still — and all follow London/New York hours.
• Liquidity runs on a schedule: overlaps and core sessions are cheap, weekends, off-hours and news windows are expensive.
• Any strategy’s expected edge must clear the spread of the specific instrument it trades, not the asset class average.