Best Low Spreads Forex Brokers 2019

On any trading platform, there are two prices for each financial instrument – the bid and ask price. When buying or going long, traders use the ask price. When selling or going short, they use the bid price.

The difference between the two prices (bid and ask) represents the spread. It is a source of income for the broker (fee), thus a cost for the trader. Therefore, the lower the spread, the better for the trader.

Lowest FIXED and VARIABLE spreads:

Rank
Broker
Special Offer
Min Deposit
Spreads From
Rating
Max Leverage
Regulations
Support
Start Trading
1
Lifetime demo account
$250
0.1 PIPs
30:1
CFTC
1
Spreads From 0.1 PIPs
Max Leverage 30:1
Min Deposit $250
Register now
2
EUR/USD from 0.5 pips
$200
0.5 PIPs
30:1
FCA, CySEC, ASIC, AMF
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs. Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
2
Spreads From 0.5 PIPs
Max Leverage 30:1
Min Deposit $200
Register now
3
0.01 minimum lot
$10
1.2 PIPs
500:1
3
Spreads From 1.2 PIPs
Max Leverage 500:1
Min Deposit $10
Register now
4
No commissions
$50
0.8 PIPs
30:1
CIMA, NFA, CFTC, FCA, IIROC, ASIC, FFA Japan, MAS, SFC of Hong Kong
Forex trading involves significant risk of loss and is not suitable for all investors.
4
Spreads From 0.8 PIPs
Max Leverage 30:1
Min Deposit $50
Register now

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The most recent and regularly updated Forex spreads comparison table!

Compare and get the best deal!

Notes:

Many brokers offer the same spreads on Mini and Standard accounts.

If spreads on those accounts differ, we list spreads for STANDARD accounts.

Spread typeFIXED Forex Broker EURUSD GBPUSD USDJPY EURJPY GBPJPY USDCHF USDCAD AUDUSD NZDUSD AUDJPY CADJPY NZDJPY EURGBP EURCHF
fixed AccentForex 2 3 2 3 6 3 4 4 4 x x x 4 4
fixed + commission ACFX 0 0 0 0 0 0 0 0 0 0 0 0 0 0
fixed Admiral Markets 1 2 1 3 5 2 3 2 3 3 4 5 3 3
fixed AFX Capital 2 3 2 3 6 3 4 3 4 6 6 7 3 3
fixed AL Trade 2 3 2 4 6 3 4 2 4 5 5 8 2 2
fixed AvaTrade 3 4 3 4 8 4 5 4 5 6 7 8 3 4
fixed BDSwiss 3 4 4 3 2 8 4 3 4 6 6 7 3 3
fixed Bulbrokers 2 4 3 3 7 3 4 3 4 6 x x 3 3
fixed Charter FX 4 5 5 5 5 10 5 5 5 5 x x 5 5
fixed Citypoint Trading 2 3 3 3 8 3 4 3 4 x x x 2 3
fixed CMC Markets 2 3 2 3 8 2 4 2 5 4 5 7 2 2
Spread type Forex Broker EURUSD GBPUSD USDJPY EURJPY GBPJPY USDCHF USDCAD AUDUSD NZDUSD AUDJPY CADJPY NZDJPY EURGBP EURCHF
fixed Deltastock AD 2 4 3 4 8 3 4 3 5 5 6 8 3 3
fixed Easy-Forex 3 5 4 4 9 4 5 4 5 8 7 11 4 4
fixed eToro 3 5 2 4 6 3 5 4 5 7 8 4 5
fixed FIBO Group 2 3 3 3 7 3 4 3 4 5 6 8 2 3
fixed Finexo 3 4 3 4 7 4 4 4 4 6 6 7 4 4
fixed Forex Global Market (FXGM) 4 4 4 4 12 4 4 4 4 6 7 10 4 4
fixed FXOptimax 2 2 2 3 6 2 3 3 5 5 5 7 3 3
Spread type Forex Broker EURUSD GBPUSD USDJPY EURJPY GBPJPY USDCHF USDCAD AUDUSD NZDUSD AUDJPY CADJPY NZDJPY EURGBP EURCHF
fixed Forex-Metal 2 3 2 4 8 3 4 4 4 6 10 7 3 3
fixed FX Choice 1.5 2 2 2 5 2 2.5 2.5 3.5 3 5 7 2 1.5
fixed ForexCT 4 6 4 5 5 5 7 4 8
fixed ForexYard 3 4 3 4 6 4 4 4 4 6 8 8 4 4
fixed FXD24 2 3 3 4 8 3 4 4 9 6 6 8 2 3
fixed FXOpen 2 3 2 3 7 3 4 3 5 6 6 10 3 3
fixed GCI Financial 2 3 2 3 8 3 3 3 3 3 3
Spread type Forex Broker EURUSD GBPUSD USDJPY EURJPY GBPJPY USDCHF USDCAD AUDUSD NZDUSD AUDJPY CADJPY NZDJPY EURGBP EURCHF
fixed Hirose Financial UK 0.7 0.9 0.6 1.2 1.7 1.5 2 0.9 2 1.4 3.2 5 0.9 2
fixed HY Markets 4 4 4 9 9 4 6 4 x 9 13 x 7 13
fixed ICM Capital 1.6 2.7 1.9 3 6 2.8 3 3 4 4 6 15 3 3
fixed ICM – iTrade Capital Markets 2 3 2 3 8 3 4 4 4 4 x x 4 4
fixed IFC Markets 2 3 3 3 7 3 4 3 5 5 5 9 2 3
fixed iForex 3 4 3 5 8 4 5 4 5
fixed IHI – Investment House International 2 3 3 4 9 3 4 4 4 8 x x 4 4
fixed InstaForex 3 3 3 3 7 3 3 3 3 10 10 10 3 3
fixed InvestTechFX 0.5 0.5 0.5 1 1 0.5 0.5 0.5 1 1 1 1 1 1
fixed Liquid Markets 1.8 2.5 1.8 2.3 4.1 2 2.7 2.2 3.2 2.5 3.5 4 2.2 2.9
fixed LiteForex 3 3 3 3 7 3 3 3 3 4 9 14 3 4
fixed MasterForex 2 3 2 3 7 3 4 3 5 6 6 10 5 4
fixed(LITEForex) MAYZUS 2 3 2 4 7 3 4 3 4 5 6 10 3 3
fixed MBCFX 2 2 2 2 2 2 2
Spread type Forex Broker EURUSD GBPUSD USDJPY EURJPY GBPJPY USDCHF USDCAD AUDUSD NZDUSD AUDJPY CADJPY NZDJPY EURGBP EURCHF
fixed One Financial Markets 2 3 2 3 8 3 4 2 4 5 5 6 2 3
fixed PFG FX – Pro Finance Group 2 3 4 8 7 4 5 5 6 6 6 8 3 7
fixed Profiforex 2 3 2 3 7 3 3 3 4 4 5 x 8 12
fixed Real Trade Group 1 2 1 3 6 2 2.5 2 3.5 3.5 x 6 1.6 2.5
fixed RFXT – Royal Forex Trading 2 3 2 3 5 3 3 3 5 7 6 7 3 3
fixed RoboForex 2 2 3 4 8 4 4 4 5 6 6 8 3 3
fixed(mix) Swiss International 3 4 4 4 8 4 5 5 5 5 5 8 4 5
fixed thinkorswim 2 4 3 4 8 4 4 4 4 5 7 7 3 4
fixed Trader’s Way 2 3 2 3 7 3 4 3 4 5 6 7 3 3
fixed UFXMarkets 3 5 4 4 9 4 5 4 6 x x x 5 5
fixed X-Trade Brokers (XTB) 1.4 2.6 2.5 3 5.3 2.5 3 3 3.8 4.5 5.5 5.3 2.5 3
fixed XForex 3 4 3 3 7 4 4 5 5 6 6 12 3 4
fixed YouTradeFX 3 4 3 4 8 4 5 4 5 6 7 8 3 4
Spread typeVARIABLEas low as Forex Broker EURUSD GBPUSD USDJPY EURJPY GBPJPY USDCHF USDCAD AUDUSD NZDUSD AUDJPY CADJPY NZDJPY EURGBP EURCHF
variable AAAFx 1.5 1.9 1.9 2.1 2.7 1.9 2.7 2.2 2.7 2.7 3.5 3.3 2.3 2.8
variable Abshire-Smith 1.4 2.1 1.3 2.9 5 2.1 2.3 2.8 2.7 4.1 x 4.3 1.8 2.7
variable AccentForex 0.8-2 0.8-3 0.8-2 0.9-3 4-7 1.3-3 1.3-3 1-3 3-4 2-5 4-7 3-10 0.5-4 1-4
variable ACFX 2-3 3-4 2-3 4-5 8-9 2-3 3-4 3-4 5-6 8-10 6-8 11-13 4-5 4-5
variable ActivTrades 0.9 1.9 0.9 1.9 2.9 1.9 1.9 1.9 1.9 2.9 2.9 3.9 1.9 1.9
variable AGEA 2 4 3 4 8 4 4 4 4 5 x x 3 4
variable Alpari UK 1.6 2.5-2.8 2 3.2 5.5-5.6 2.6-2.7 3.5-3.7 2.8 6 5 5 7 2-2.1 2.8
variable ATC Brokers 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
variable(average) Axiory 1.9 3 2.2 3.5 6 3 3.5 3 x 6 6 x 3 3.5
variable AxiTrader 1.4 2 1.5 2 4.5 2 2.5 2 3 3.5 x 4 2 2.5
variable Blackwell Global 2.2 3 2.2 2.7 3.8 2.5 3.4 3 4 4.2 4.4 4.9 2.6 2.5
variable average Bulls Capital Markets 1.6 2.5 2.4 2.8 3.3 2.6 3 2.8 3.2 3 2.8 3.6 2.4 2.6
variable(Level 2) Deltastock AD 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
variable DF Markets 1 2 3 2.5 5 2 2.5 2 2.5 5 6 8 2.2 3
variable Divisa Capital 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
variable Dukascopy Bank SA 0.5-1 1-2 1-1.5 1-2 4 1-2 1-2 1-2 1-2 5 1-2 1-2
VARIABLEas low as Forex Broker EURUSD GBPUSD USDJPY EURJPY GBPJPY USDCHF USDCAD AUDUSD NZDUSD AUDJPY CADJPY NZDJPY EURGBP EURCHF
variable(average) EXNESS 0.1-0.9 0.1-1.1 0.2-0.9 0.9-2 0.6-2 0.3-1.2 0.3-1.4 0.2-1.4 0.2-1.7 0.4-1.7 10 10 0.3-1.3 1.5-7
variable(snapshot) FastBrokers 1.3 2.3 1.1 1.5 2.9 2.2 1.6 1.7 3 2.1 2.8 x 2 2.5
variable(as low as) FBS 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
variable(average) FinFX 0.6 1.4 0.9 1.6 1.7 2.7 1.6 1.7 2.5 1.3 2.1 2 1.4 1.2
variable Forex.com 1-1.5 0.9-3.2 0.9-1.9 1.1-3.1 2.1-5 0.9-3.1 0.9-3.7 0.9-2.3 0.9-2.9 2.8-4.3 2.8-4.5 2.8-4.9 1-3.7 1.3-3.5
variable Forex FS 3 4 3 4 6 4 5 4 6 6 5 6 3.5 4
variable FX Choice 0.5 1 1 1 2 1 1 1 2 2 2 3 1 1
variable FXCM – Forex Capital Markets 1-2.3 1-3 1-2.4 1.1-3.1 1.1-5.4 1-3 1-3.7 1.1-3.1 1.1-4 1.4-4.8 1.6-5.7 1.1-4.4 1.1-3.2 1.4-3.9
variable FXDD 2 4 3 4 8 3 5 4 5 6 7 x 5 4
VARIABLEas low as Forex Broker EURUSD GBPUSD USDJPY EURJPY GBPJPY USDCHF USDCAD AUDUSD NZDUSD AUDJPY CADJPY NZDJPY EURGBP EURCHF
variable FXOptimax 1.8 1.8 1.8 2.5 4.5 1.8 2 2 3 4 3 6 2.5 3
variable FxPro 0.8-2 0.8-3 0.8-2 0.9 4 1.3-3 1.3-4 1-3 3-5 5 5 10 0.5-5 1
variable(institutional) GAIN Capital Group 0.2 0.5 0.2 0.4 2 0.5 0.5 0.5 0.5 2.5 2 2.5 0.5 0.3
variable(individual) GAIN Capital Group 0.9-2.1 0.9-3.2 0.9-1.9 1.1-3.1 2.1-5 0.9-3.1 0.9-3.7 0.9-2.3 0.9-2.9 2.8-4.3 2.8-4.5 2.8-4.9 1-3.7 1.3-3.5
variable Gallant Capital Markets 1-1.5 2.8 1.8 3.2 4.2 2.6 2.7 2.6 3.3 x 4.2 4.2 2.9 2.8
variable Gedamo Investments 1.4 2.5 1.4 2.4 4.3 2.9 2.9 2.9 3.3 3.2 3.3 4.9 2.2 2.5
variable Go Markets 0.5-1 2 1.5 3 5 1.5 3.2 1.5 3 3.2 x 5.2 2.3 2.7
variable Hantec Markets 2 3 2 3 5 3 4 3 4 4 4 5 2.5 3
variable HotForex 0.8 1.3 0.9 1.8 3 1.2 2.5 3.5 2 4.5 3 4 1.3 2.5
variable IamFX 0.1-1.5 0.3-1.2 0.2-1.3 0.2-1.3 0.2-5 0.2-1.3 0.2-2.5 0.2-2.5 0.1-5 0.1-5 0.1-6 0.1-5 0.3-2.5 0.3-2.5
variable IBFX 0.0-1.8 0.0-3.5 0.0-2.5 0.0-3.2 0.0-5.6 0.0-3.2 0.0-3.2 0.0-3.3 0.0-4.3 0.0-4.5 x 0.0-5.8 0.0-2.8 0.0-3.6
variable IG Markets 0.8 1 0.8 1.7 2.8 1.9 2.5 0.8 2 3.5 4 5 1 2
variable(4 digit spread) IKON Global Markets 2 3 2 4 8 3 4 3 4 9 8 8 4 8
variable(5 digit spread) IKON Global Markets 0.8 1.9 0.9 1.4 4.7 1.3 2.1 1.4 2.9 2.9 4 4.8 1.5 1.7
VARIABLEas low as Forex Broker EURUSD GBPUSD USDJPY EURJPY GBPJPY USDCHF USDCAD AUDUSD NZDUSD AUDJPY CADJPY NZDJPY EURGBP EURCHF
variable Interactive Brokers 0.5-2 0.5-2 0.5-2 0.5-2 0.5-2 0.5-2 0.5-2 0.5-2 0.5-2 0.5-2 0.5-2 0.5-2 0.5-2 0.5-2
variable Lider Forex 1-2.3 1-3 1-2.4 1.1-3.1 1.1-5.4 1-3 1-3.7 1.1-3.1 1.1-4 1.4-4.8 1.6-5.7 1-4.4 1.1-3.2 1.4-3.9
variable Liquid Markets 0-0.6 0.3-1.6 0.1-1.2 0.4-1.5 0.4-2.3 0.3-1.5 x 0.1-1.6 0.4-1.9 0.5-1.6 0.7-1.9 0.7-2.1 0.2-1.2 0.1-1.9
variable MB Trading 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
variable NordFX 1-1.6 1-2.2 1-1.6 1-3.1 1-3.6 1-2.7 1-3.1 1-2.2 1-3.6 2-3.6 1-3.1 3-4.5 1-3.1 1-2.7
variable OANDA 0.9 2.4 1.2 2.3 4.3 1.7 2.3 1.8 2.3 2.1 3 2.9 1.4 2.3
variable OctaFX 0.3-1.5 1.5-2.5 1-1.5 2-3 5-6 1.5-2.5 1-2.5 1.5-2 3-3.5 0.6-2 0.6-2 0.6-2.5 1-1.6 1.5-2.5
variable Pacific Financial Derivatives (PFD) 0.4-0.8 2.4 0.8 1-2 2-3 1-2 2-3 2 2-3 1-2 2-3.5 2-3 2 1-2.5
variable PaxForex 1 3 3 10 7 3 4 4 4 6 6 7 5 3
variable Pepperstone 0.5-1.8 1-2.2 1-1.7 1-2.2 1-3.2 1-2.9 1.1-2.4 1-1.8 1.2-3.6 1-2.2 1-2.4 1.2-4.4
variable RTFX 2-2.8 2.5-3.5 2-3 2.2-3 5-7 2.5-3.5 3-4 2.8-4 3-4 3.5-5 4-5.5 4.7-6.5 2.1-2.8 2.2-3
variable Questrade 1.6 1.9 1.6 1.8 3.3 2 2 1.8 1.3 4 3.5 4 0.7 1
variable Real-Forex 1.8 2.5 1.8 2.6 3.8 2.6 2.4 2.9 3.5 3.5 1.7 2.8 2.3 2.5
variable RetailFX 3 5 2 4 6 3 5 4 5 7 8 x 4 5
variable RFXT – Royal Forex Trading 0.8-1.8 1.7-2.7 0.8-1.8 1.5-2.5 2.1-3.1 1.5-2.5 1.4-2.4 1.3-2.3 2.2-3.2 1.8-3.2 1.7-2.7 2.1-3.1 1.3-2.3 1.9-2.9
VARIABLEas low as Forex Broker EURUSD GBPUSD USDJPY EURJPY GBPJPY USDCHF USDCAD AUDUSD NZDUSD AUDJPY CADJPY NZDJPY EURGBP EURCHF
variable RoboForex 0.4-0.9 0.5-1.6 0.3-1.1 0.6-2 0.5-2.9 0.4-1.5 2.4-3 1.8-2.9 2-3.8 1.9-3.3 1.9-3.8 0.4-2.4 0.4-1.2 0.5-2
variable Saxo Bank 2 4 3 3.5 7 3 4 3 4 6 5 7 3 3
variable SmartTradeFX 0.9 2.6 0.9 2.9 4.6 1.6 2.7 2.9 3.7 2.5 3.5 x 1.8 1.6
variable Sunbird 0.7-1.7 1-2.6 0.8-1.9 1-2.9 1.8-3.9 1-2.5 1-2.7 1-2.7 1.5-3.7 1.5-3.7 2-3.4 2-4.3 0.5-2.3 0.5-2.4
variable TradeKing 2.3 0.5-1.5 0.5-1.5 0.5-1.5 1.8-2.8 0.5-1.5 0.5-1.5 0.5-1.5 0.5-1.5 1.5-2.5 2-3.5 2.5-3.5 0.4-0.9 0.5-1
variable(average) Trader’s Way 0.3 1.2 0.8 1.6 2.1 1.1 1.2 1.1 1.9 1.6 1.7 2.2 0.9 2.3
variable(average) Traders Trust 1.8 2.2 1.9 2.5 3.5 2.3 3.8 2.8 3.2 3.5 3.5 x 2.1 2.6
variable TradeStation Securities 1 1.5 1 1.5 3 2 1.5 1.5 2 2 2 3 2 2
variable Trading Forex 0.8 1 0.9 1.8 2.5 1 1.3 1.1 1.6 2.3 2.5 2.9 1.9 1.8
variable XM 1.4-1.6 1.4-2.6 1.4-1.7 x 2-3.5 1.4-2 1.4-2.6 1.4-2.2 1-2.9 2-4.4 2-4.9 2-5 1-1.8 1.4-2
variable(snapshot) UpFX
variable Vantage FX 0.5-2.3 2 1.5 3.4 5 1.5 3 1.5 3 3.2 x 5.5 2.3 3.2
variable Vantage FX UK 0.5-2.3 2 1.5 3.4 5 1.5 3 1.5 3 3.2 x 5.5 2.3 3.2
variable WH Selfinvest 0.8-3 0.8-4 0.8-3 1-4 2-8 0.8-4 2-5 0.8-4 0.8-5 1.4-5 3-7 3-7 1-3 1-6
variable Windsor Brokers 2 3 2 3 8 4 4 3 4 7 5 7 3 3
variable X-Trade Brokers (XTB) 1.4 0-2.2 0-1.8 1.7-2.1 2.3-4.8 0-2.2 1.7-2.8 1.3-2.2 2-2.8 3-3.9 2.8-4.1 3.2-4.5 1.1-2.2 1.5-2.2
variable + commission X-Trade Brokers (XTB) 0.57 0.95 0.42 0.71 0.6 0.75 1
Forex Broker EURUSD GBPUSD USDJPY EURJPY GBPJPY USDCHF USDCAD AUDUSD NZDUSD AUDJPY CADJPY NZDJPY EURGBP EURCHF
Sucden (UK) Limited 3 4 3 3.5 7 4 4 3 4 6 5 7 3 3

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Variable vs Fixed Spread Trading

The table below explains the main differences between variable spreads offered by ECN brokers and fixed spreads offered by a traditional dealing desk broker.

Not all brokers who offer variable spreads provide ECN platforms: continue by learning the difference between ECN, STP and Dealing Desk brokers

Features Variable Spreads ECN platform Fixed Spread Dealer platform Commentary
Better Prices YES NO ECN platform allows traders to get better price quotes, and often be able to trade inside the pip. Such variable spreads can be as low as 0 at times.
Trading on Interbank and between traders YES NO Unlike with fixed spreads form a Dealing desk broker, variable spreads from ECN broker provide maximum flexibility: a trader can deal on prices streamed directly from participating banks as well as deal on prices entered by other traders. Competitive bids/offers create a base for better quotes.
Instant trading without re-quotes YES NO Traders trading on ECN platform don’t get re-quotes. The platform technology uses strict price+time dealing protocol which ensures that trading positions are filled at the price seen on the screen.

 


What is a Spread?

Let’s pick the EURUSD, the most popular currency pair among retail traders.

The difference between the bid and ask is 0.5 pips or half a pip, as the image shows. Depending on the volume traded, it has a different value for each trade.

For instance, when trading 0.1 lots on the EURUSD pair, a one pip profit roughly translates into $1. Hence, half a pip spread cost represents $0.5 on a 0.1 lot trade. Note that the spread doesn’t increase with the number of pips gained. It remains constant and is paid regardless if the trader makes a profit or not.

How does a broker determine its spreads?

The liquidity provider determines the spreads. The more liquidity providers, the more competitive the spreads become, especially during illiquid market moments.

There are different types of brokers, and the way they are organized influences the spreads they offer. For instance, Some brokers offer fixed spreads but don’t be fooled into thinking that’s the only cost, because in this case, typically, other commissions and hidden fees exist.

In any case, the spread is one of the primary income sources for the broker and sits at the heart of its operation.

Therefore, it is essential to be aware of the brokers offering the lowest spreads possible without adding an extra fee and hidden commissions.

Low spread trading – How will low spreads benefit your P/L

Coping with spreads can be a struggle for the retail trader. Retail traders, especially new traders sometimes trade via scalping. This is opening and quickly closing trades for immediate returns.

Imagine you have a trading strategy that targets ten pips for every trade. If the spread is one or two pips, that’s ten or twenty percent of the cost. Add to it the commissions and other associated costs, and the strategy isn’t so profitable anymore.

On top of that, spreads widen during critical economic releases and during illiquid times. In high volatility environments, spreads increase, and it is easier to have the stop loss hit. Therefore, is not only important to choose a low spreads broker, but one that has tight spreads during all moments in a trading day, not only when the market is calm.

Choosing a Low Spread Broker

Most brokers offer the tightest spreads on the most popular pairs (e.g., EURUSD) but then wider ones in markets with lower liquidity. The comparison tables provided here should be of great help in finding the desired broker to trade with.

Fixed Vs variable spreads

As the name suggests, fixed spreads do not change. However, this comes at an increased cost, as they are always wider than variable spreads.

A news trader may favour fixed spreads despite being wider. It is a guarantee offered by the broker that it’ll execute the orders no matter what. But a swing trader and especially a technical trader benefits the most from variable spreads and direct execution, despite paying more to get in or out of the market.

Why spreads increase

When the market moves fast, spreads increase. It happens during economic releases or other market-related news that creates volatility.

When spreads widen and quoted higher than advertised

During increased market volatility variable spreads will widen for all dealing desk brokers, which means a trader won’t get the lowest spreads advertised by a Forex broker.

However, with ECN brokers clients will have actually lower spreads when activity in the market rises and trading volume increases – during those times variable spreads can drop to 1/10 of a pip = 0.1 pip and even be quoted at zero.
(With dealing desk brokers variable spreads never drop below the advertised point, they can only rise.)

Fixed spreads, although called “fixed”, can also be subject to change.

There are brokers who offer Fixed Guaranteed spreads – such spreads don’t change no matter what.

All other brokers offer Fixed-with-Exception spreads (often marked with stars*) – these are the spreads that can change should the market become extremely volatile, for example, during important news announcements, such as Non-Farm Payroll, Unemployment Rate, Consumer Price Index, Retail Sales, Interest rates etc. During other trading hours, spreads remain fixed.

Also, traders should note the common practice of widening spreads during weekends, as well as for some Forex brokers – during night hours from Monday to Friday.

Conclusion

Traders should pick the broker offering the lowest spreads possible. However, the best broker is not always the one offering the lowest possible spreads. When choosing a broker, look for the combination of lower spreads, fair execution (this includes risk management tools like stop losses and take profit orders), little or no commissions, and no hidden costs.


FAQ’s

Which broker to choose: with fixed or variable spreads?

It depends on the trading strategy. Forex fixed spreads are wider but guaranteed, while variable spreads tighten during calm markets and widen significantly in volatile markets.

Are spreads the same on all currency pairs?

No. Typically, major pairs (i.e., the ones paired with the USD) have tighter spreads than cross pairs (i.e., with no USD).

Is there a broker with 0 spreads?

Yes. But be aware that the broker must charge from other sources, and the trader ends up paying more.

What conditions to look for when choosing a low spread broker?

Multiple liquidity providers, variable spreads broker.

 

 


For more brokers of different trading conditions, we’ve pulled together the best brokers for each:

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