A token can show a price of 100 USDT while buying it costs 100.10 and selling it brings in only 99.90. Even before fees, an immediate purchase and resale would lose money. The difference comes from the bid-ask spread: the gap between the best available buying and selling quotations.
For traders, that gap is part of the cost of getting a trade done immediately. Its importance depends on the order size, available depth and frequency of trading. A low advertised fee does not, by itself, establish a low total execution cost.
The price you can buy at differs from the price you can sell at
In an order-book market, the best bid is the highest price currently offered by a buyer. The best ask is the lowest price currently offered by a seller. An immediate buy takes available asks; an immediate sell takes available bids. Each quotation applies only to the quantity offered there.
This is the same basic distinction described in Investor.gov’s bid-and-ask glossary, which discusses securities markets. Here, the examples apply the arithmetic to a hypothetical crypto order book; they do not imply that securities-market rules govern every crypto venue.
The last-traded price records a completed transaction. The midpoint averages two current quotations. Neither guarantees a new execution. KTX’s guide to reading a crypto order book explains how these fields fit together.
A 0.20 USDT spread is 20 basis points in this example
Suppose a hypothetical token has a best bid of 99.90 USDT and a best ask of 100.10 USDT. Assume the book stays unchanged and has enough quantity for the transactions described.
| Measure | Calculation | Result |
|---|---|---|
| Quoted spread | 100.10 − 99.90 | 0.20 USDT per token |
| Midpoint | (100.10 + 99.90) ÷ 2 | 100.00 USDT |
| Midpoint-based spread | 0.20 ÷ 100.00 × 100% | 0.20%, or 20 basis points |
One basis point is 0.01 percentage points. Expressing the spread relative to price makes different markets easier to compare: a one-cent gap has very different significance for a token priced near one dollar and an asset priced near one hundred dollars. Check the denominator when comparing reported percentages; some displays use the bid or ask instead of the midpoint.
A buyer paying 100.10 incurs a 0.10 USDT difference from the initial midpoint. That is half the quoted spread. Buying and immediately selling across the unchanged book incurs the full 0.20 USDT per token. Calling every one-way transaction a full-spread cost would overstate this midpoint comparison.
Separate the spread from fees and additional slippage
Buy 10 tokens at 100.10 and immediately sell them at 99.90. The purchase costs 1,001 USDT; the sale returns 999 USDT. The 2 USDT difference equals approximately 0.1998% of the purchase value, excluding fees. No adverse market movement is needed to produce that loss.
Now assume an illustrative fee of 0.10% on each executed notional, charged separately in USDT. The buy fee is 1.001 USDT and the sell fee is 0.999 USDT. Total fees are 2 USDT, bringing the round-trip loss to 4 USDT. These are teaching assumptions, not a statement of KTX’s fee schedule.
Slippage measures execution against a chosen expectation. Comparing a buy with the initial ask isolates deterioration beyond that ask; comparing it with the midpoint already includes crossing the spread. KTX’s slippage guide covers the expected-versus-actual distinction. State the benchmark before adding costs.
When calculating realized profit from actual purchase and sale proceeds, the spread and execution slippage are already inside those fill prices. Subtract separately charged fees as appropriate, but do not subtract the spread or slippage again.
A narrow spread can still hide an expensive larger order
Keep the same 99.90 bid and 100.10 ask, but change the available sell quantities: four tokens are offered at 100.10 and another six at 100.60. A market buy for 10 tokens, with no intervening changes, spends 400.40 plus 603.60, or 1,004 USDT before fees. Its average price is 100.40.
Relative to the initial midpoint, this purchase costs 4 USDT extra: 1 USDT from crossing half the spread on 10 tokens, plus 3 USDT from consuming the higher ask. Relative to the initial best ask, the adverse difference is 0.30 per token, approximately 0.2997%. These are two descriptions of the same execution, not two additional charges.
That is why spread and depth belong together. KTX’s liquidity guide examines how available quantity changes the price achievable for a particular order size. Daily volume cannot substitute for current depth on the side being consumed.
Price control comes with a chance of not trading
A conventional limit buy at 100.10 cannot execute above that limit. In the shallow-book example, it could buy the four available tokens and leave the remainder unfilled, depending on its time-in-force. A limit buy submitted at an immediately executable price can still take liquidity; “limit” does not automatically mean “maker.” Investor.gov’s order-type explanation describes the underlying price-limit distinction.
Posting below the ask may improve the eventual entry, but introduces waiting, partial-fill and non-execution risks. Splitting an order may reduce its immediate impact, yet later slices face a changing market. None of these choices guarantees a cheaper completed trade.
Spreads can widen when liquidity providers face greater uncertainty, reduce inventory exposure or cancel quotations. Tick size also limits how closely prices can be quoted. Compare spread, nearby quantity and fees for the same pair, venue, time and intended size. A quote from another market does not establish the price available to your order.
On the KTX BTC/USDT spot market, readers can examine bid and ask quotations alongside displayed quantities. Eligible new users can register a KTX account. Before submitting an order, compare its estimated average fill and applicable fees with the price used in the trading decision.
Two questions beyond the order book
Does zero trading commission mean zero trading cost?
No. A commission waiver does not remove the difference between executable buy and sell prices. An instant-conversion product may also build a margin into its quote. Compare the asset quantity received and the final amount paid, rather than assuming every product presents costs identically.
Does the same calculation apply to an automated market maker?
An AMM need not display a conventional bid-and-ask ladder. Its executable buy and sell quotes depend on trade size, pool rules and routing. Compare quotes for the same quantity and separate pool fees, network fees and any included price impact; a headline pool price alone is insufficient.
For educational purposes only; not investment advice. Crypto trading involves price, liquidity and execution risks.