Variable spreads refer to the difference between the buying and selling prices of a financial asset that can change over time. Unlike fixed spreads, which remain constant, variable spreads fluctuate based on market conditions, such as liquidity and volatility. This means that during times of high trading activity, spreads may narrow, while they can widen during quieter periods. Traders often encounter variable spreads in markets like forex and stocks. These spreads can impact trading costs, as a wider spread means higher expenses when entering or exiting a position. Understanding variable spreads is essential for effective trading strategies and risk management.