diff --git a/docs/user-guide.rst b/docs/user-guide.rst
index 7072663066..7bf1439ccb 100644
--- a/docs/user-guide.rst
+++ b/docs/user-guide.rst
@@ -700,6 +700,39 @@ policy permissions. `Information on how to correctly set these permissions can
 be found here
 <https://docs.aws.amazon.com/elasticloadbalancing/latest/classic/enable-access-logs.html#attach-bucket-policy>`_.
 
+Spot Instances
+~~~~~~~~~~~~~~
+Tarmak gives the ability to attempt to request spot instances for use in
+instance pools. Spot instances are very cheap, spare AWS instances that can be
+revoked by AWS at any time, given a 2 minute notification. `More information
+here <https://aws.amazon.com/ec2/spot/>`_.
+
+Spot instances can be requested cluster-wide by giving the ``--spot-pricing``
+flag to ``cluster apply``. Tarmak will then attempt a best effort spot price for
+each instance pool in the cluster, calculated as the average spot price in the
+last 3 days for that instance type in each zone plus 25%.
+
+Manual spot prices can be applied to each instance pool within the
+``tarmak.yaml`` which will override the Tarmak best effort for that instance
+pool. This is done through the ``spotPrice`` attribute under the instance pool,
+given as a number in USD. This can be added like so:
+
+.. code-block:: yaml
+
+  - image: centos-puppet-agent
+    maxCount: 3
+    metadata:
+      creationTimestamp: "2018-07-27T09:33:15Z"
+      name: worker
+    minCount: 3
+    size: medium
+    spotPrice: 0.015
+
+
+Note that Tarmak will only attempt to create spot instances for instance pools
+with the ``spotPrice`` attribute or spot pricing flag during a cluster apply.
+
+
 Cluster Services
 ----------------
 
@@ -721,3 +754,4 @@ Do the following steps to access Grafana:
 .. code-block:: none
 
   http://127.0.0.1:8001/api/v1/namespaces/kube-system/services/monitoring-grafana/proxy/
+
diff --git a/pkg/tarmak/instance_pool/instance_pool.go b/pkg/tarmak/instance_pool/instance_pool.go
index 82f5da2892..18d92e35bd 100644
--- a/pkg/tarmak/instance_pool/instance_pool.go
+++ b/pkg/tarmak/instance_pool/instance_pool.go
@@ -173,7 +173,7 @@ func (n *InstancePool) SpotPrice() string {
 }
 
 func (n *InstancePool) CalculateSpotPrice() error {
-	if n.spotPrice != "" {
+	if n.spotPrice == "" {
 		p, err := n.cluster.Environment().Provider().SpotPrice(n)
 		if err != nil {
 			return err
diff --git a/pkg/tarmak/provider/amazon/spot_price.go b/pkg/tarmak/provider/amazon/spot_price.go
index d1b58e238f..13878c8ed7 100644
--- a/pkg/tarmak/provider/amazon/spot_price.go
+++ b/pkg/tarmak/provider/amazon/spot_price.go
@@ -68,7 +68,7 @@ func (a *Amazon) SpotPrice(instancePool interfaces.InstancePool) (float64, error
 		total /= float64(len(prices))
 	}
 
-	total *= 1.10
+	total *= 1.25
 
 	return total, result.ErrorOrNil()
 }