> For the complete documentation index, see [llms.txt](https://docs.ashswap.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ashswap.io/getting-started/understand-ashperp/ashperp-terms/spread.md).

# Spread

## Fixed Spread

The implementation of spreads serves to deter the manipulation of oracles, enabling the exchange to include tokens with lower market caps. 

Note that the spread differs across each trading pair, with those having lower liquidity, particularly smaller pairs, experiencing larger spreads. Consequently, using an NFT is particularly more effective for these types of pairs.

## Dynamic Spread

Dynamic Spread is an additional charge over the fixed spread for a pair, if it exists. This variable spread depends on factors such as the open interest in the pair, the size of the trade being executed, and whether the trade is a long or a short. 

The primary aim of this parameter is to mitigate the risk of manipulation in spot oracle prices, thus facilitating the inclusion of pairs with lower liquidity than previously possible. 

The impact of this price change will vary for each pair and will differ based on the trade direction, whether it's a long or a short. For each trading pair, there are two key parameters to consider: the 1% depth above market price for long positions, and the 1% depth below market price for short positions.

$$
Dynamic Spread(%)=\frac{OI(long/short)+\frac{NewTradeOI}{2}}{1%Depth(above/below)}
$$

This means that the initial price for any trade will match the current market price of the pair. However, this price might be slightly increased for trades aiming to buy (longs) or decreased for trades aiming to sell (shorts), depending on how many people are trading that pair. 

Also, it's important to remember that this extra price adjustment (known as price impact or spread) doesn't apply when you're closing a trade.

## Slippage

* Due to market volatility, the execution price might largely differ from the market price at the time a market order is placed. To address this concern, traders have the option to establish a slippage threshold for their market orders to mitigate significant disparities between the intended and actual execution prices.
* For example: setting a slippage of 1% means when the oracle price has been filled and the execution price (spread included) is larger than the market price when the order was initiated by 1% or more, the order will not be fulfilled.

## Max Spread

* Traders can also configure maximum spread for their limit/stop orders to prevent similar price deviation.
* For example: setting a max spread of 1% means when the oracle price has been filled and the execution price (spread included) is larger than the determined limit/stop price by 1% or more, the order will not be fulfilled.

<details>

<summary>What are the spread for asset pairs on AshPerp?</summary>

A fixed spread of 0.04% is applied for BTC/USD and ETH/USD. Dynamic spread is applied for other asset pairs.

</details>


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