Forex spreads 8

Lowest Spread Forex Brokers.

Picking a Low Spread Forex Broker or Zero Spread Account is essential, especially for Forex trading and scalping. Paying less cuts trading costs in the long run, especially if you are an active trader. We’ve put together this list of the best zero spread brokers to make things easier for you. We collected trustworthy and regulated brokers that have a strong reputation.

Low Spread Forex Brokers 2023.

Based on our research, here are the best low spread brokers or zero spread brokers .

Pepperstone – Lowest Spread Forex Broker Overall FP Markets – Ultra-competitive Low Spreads Broker AvaTrade – Fixed Low Spreads Forex Broker IC Markets – Raw Spreads Account Forex Broker from 0.0 Pips – Best Execution Low Spread Forex Broker FXTM – High Leverage Tight Spreads Broker eToro – Great Copy Trading Low Spread Forex Broker IG – No Commission Broker with Low Spreads FxPro – 0 Spread Forex Broker Fusion Markets – Low Commission Forex Broker.

Our Top 3 Picks.

PFI Rating 4.9.

PFI Rating 4.9.

PFI Rating 4.8.

Table of contents.

Low Spread Forex Brokers 2023 Pepperstone – Lowest Spread Accounts and Best Overall Pepperstone Quick Facts Pepperstone Accounts Fees Compared How does Spread work in Forex? How are spreads calculated? How to Spread Bet in Forex? What is the lowest spread in Forex? What is a zero-spread account? Raw Spread Account vs. Standard Account.

Our Top Pick.

PFI Rating : 4.9/5.

Pepperstone – Lowest Spread Accounts and Best Overall.

All things combined , Pepperstone is our winner as the best broker with the tightest Forex Spreads and no commissions . Their Standard Account offers low average spreads from 0.6 pips for the EUR/USD pair and no commission trading fees. Their Razor account offers spreads from 0.0 – 0.3 pips + EUR 5,23 round turn per 100k traded.

Pepperstone has low trading fees and low costs overall compared to other brokers charging higher spreads.

76.6% of retail investor accounts lose money when trading CFDs with this provider.

View More.

Great For : Very Low Spreads Forex Trading.

Pepperstone Quick Facts.

Pepperstone is a safe and reliable forex trading platform trusted by many traders across the globe. Peperstone offers fast execution speeds on the popular Metatrader 4, Metatrader 5, and cTrader platforms . Their customer service is one of the best in the industry.

Pepperstone Accounts.

Pepperstone offers two account types . The Razor account and the Standard account. The Standard account is great if you are a casual trader and don't want to pay commissions. What sets Pepperstone apart from the competition is they offer competitive spreads for both the standard and ECN pricing accounts.

For frequent traders that wish to enjoy forex products with competitive spreads, their Razor account is a good choice.

Pros Cons Forex Fees Mostly CFD Trading Platform Account Types.

Mobile App : 4.9/5.

Regulation : 4.9/5.

Fees : 4.9/5.

Min. Deposit : $0.

Overall : 4.9/5.

Runner Up.

PFI Rating : 4.9/5.

FP Markets.

First Prudential (FP) Markets is another excellent choice for low spread and high leverage. They are a well-regulated and trustworthy zero spread forex broker. They offer consistently low spreads starting at 0 pips and averaging around 0.45 pips. It offers access to a range of third-party platforms for you to choose from and an impressive selection of educational content.

On the downside, FP Markets isn’t available to US citizens.

On FP Markets Official Website.

Pros Cons Spreads starting at 0 pips Not available in the US Wide selection of platforms Educational resources Fast order execution.

Low Spread Social Trading Broker.

PFI Rating : 4.9/5.


AvaTrade is an excellent low spread broker for active traders . They offer competitive fixed spreads of 0.9 pips with no commissions. The minimum deposit is $100 to open an account with AvaTrade. They offer access to their proprietary platforms and both MT4 and MT5. On the downside, they charge above-average inactivity fees.

The Australian Securities and Investments Commission (ASIC), the Financial Sector Conduct Authority (FSCA), FCA, and CySEC regulate AvaTrade.

76% of retail investor accounts lose money when trading CFDs with this provider.

Pros Cons Highly competitive rates of 0.9 pips Inactivity fees Wide range of currency pairs Easy account opening process Free deposits and withdrawals Great research tools.

PFI Rating : 4.8/5.

IC Markets.

With an average spread of 0.1 pips , IC Markets has one of the best spreads on this list. IC Markets fast order execution makes it a top choice for scalpers and algorithmic traders. IC Markets has no deposit or withdrawal commission fees. Plus, customers can access powerful platforms, including cTrader, and MetaTrader. IC Markets' Raw Spread Account features zero spreads + commissions.

A downside is that there is a high minimum deposit required to open an account.

74-89% of retail investor accounts lose money.

Pros Cons Average spreads of 0.1 pips High Minimum account deposit Fast order execution speed No withdrawal or deposit fees Powerful platform.

PFI Rating : 4.8/5. is one of the top-rated brokers in the US. This is another safe and reliable choice. gives you access to 80 currency pairs. Although spreads are low, there is a flat commission rate of $5 per standard lot. It offers three premium platforms as well as the popular MT4 platform.

A downside is that passive traders will face inactivity fees. There is also a long waiting period for account verification.

On Official Website.

Pros Cons Top-rated broker Inactivity fees Low fees Long account verification waiting period Diverse research tools Great range of currency pairs Access to premium educational resources.

PFI Rating : 4.8/5.


ForexTime (FXTM) is another reliable choice for experienced and beginner traders. FXTM offers traders spreads starting at 0.1 pips with a great selection of account types.

FXTM gives clients access to over 200 markets which include 48 currency pairs. It stands out for its excellent customer service and educational tools.

On the negative side, FXTM charges high CFD fees. There are also inactivity fees and withdrawal fees.

On FXTM Official Website.

Pros Cons Spreads from 0.1 pips High CFD fees Responsive customer service Inactivity and withdrawal fees Extensive educational tools Fast account opening process.

Lowest Spread Brokers Comparison.

Below we compared low spread forex brokers based on general information such as foundation year, regulation, offering of investments, and more.

Trading Platform Pepperstone FP Markets AvaTrade IC Markets FXTM eToro Founded 2010 2005 2006 2007 2001 2011 2007 Regulation ASIC, CySEC, FCA, SCB, DFSA, BaFin, CMA ASIC, CySEC FCA, ASIC, FSCA, FRSA, Israel Securities Authority, Financial Services Agency, Financial Futures Association of Japan ASIC, CySEC, FSA, SCB CFTC FCA, CySEC, FSCA, MiFID, FSA, BaFin, AMF, FCMC, AFM FCA, CySEC, ASIC, FSAS Offering Of Investments CFDs on Forex, Crypto, Shares, Indices, Crypto Forex, Shares, Metals, Commodities, Indices, Cryptocurrency, Bonds, ETFs Forex, Stocks, Commodities, FXOptions, Cryptocurrencies, Indices, ETFs, Bonds CDFs on Forex, Commodities, Indices, Bonds, Cryptocurrency, Stocks, Futures Forex, Shares, Commodities, Cryptocurrencies, Gold and Silver, Indices Forex, Indices, Forex Indices, Commodities, Metals, Stocks Stocks, ETFs, Forex, Crypto, Indices, Commodities Minimum Deposit $0 $100 $100 $200 $100 $50 $50 - $100 Demo Account Yes Yes Yes Yes Yes Yes Yes Withdrawal Fee $5 $0 $0 $0 $25 in the US, and $40 for international $3 for Credit Cards, $20 - $40 bank transfer, $0 for Skrill / Neteller $5 Inactivity Fee $0 $0 $50/month After 3 Months $0 $15/month after 12 months $5/month after 6 months $10/month Deposit Methods Credit/debit cards, Bank/Wire Transfer, PayPal, Neteller, Skrill, UnionPay Credit Cards. Debit Cards, Bank Transfer, Ngan Luong, FasaPay, Online Pay, Broker to Broker, Neteller, Skrill, PayTrust, PayPal, Bpay, Poli Credit and Debit Cards, Wire Transfer, e-payments Credit Cards, Debit Cards, PayPayl, Neteller, Skrill, UnionPay, Wire Transfer, Bpay, Fasapay, Broker to Broker, Poli, Thai Internet banking, Klarna, Rapidpay, Vietnames Internet Banking Credit Cards, Debit Cards, Wire Transfer Credit Cards, Debit Cards, e-Wallets, Bank Wire, Local Payment Solutions PayPal, Skrill, Neteller, Credit Card, Debit Card, Rapid Transfer, iDEAL, Klarna / Sofort Banking, Bank Transfer, Online Banking - Trustly, POLi.

Fees Compared.

While it is hard to compare fees as spreads vary, we compared fees below to give you a basic understanding. When comparing fees, you should look for all fees combined, not just the spreads.

Trading Fee Pepperstone FP Markets AvaTrade IC Markets FXTM EURUSD Minimum from 0.0 and 0.17 average spread (Razor Account) Minimum from 0.6 and 0.77 average spread (Standard Account) from 0.0 - 1.3 (average 0.2 pips) Spread: 0.9 Raw Spread account: 0.0 pips spread and $3.5 (per lot per side) commission Standard Account: 0.6 pips spread and $0.0 (per lot per side) commission average 1.15 Commissions +Minimum 1.6 pips - Typical 1.9 (Standard Account) Minimum 1.9 pips - Typical 1.9 (Micro Account)Minimum 0 pips - Typical 0 (AdvantageAccount) GBPUSD Minimum from 0.0 and 0.59 average spread (Razor Account) Minimum from 0.6 and 1.19 average spread (Standard Account) from 0.0 - 1.8 (average 0.7 pips) Spread: 1.5 Raw Spread account: 0.0 pips spread and $3.5 (per lot per side) commission Standard Account: 0.6 pips spread and $0.0 (per lot per side) commission average 1.7 Commissions+Minimum 1.8 pips - Typical 2 (Standard Account)Minimum 2.2 pips - Typical 2 (Micro Account)Minimum 0.1 pips - Typical 0.2 (AdvantageAccount) Apple Fees 0 + market spread Spread 0.13% Spread N/A Spread + Commission Tesla Fees 0 + market spread Spread 0.13% Spread N/A Spread + Commission Amazon Fees 0 + market spread Spread 0.13% Spread N/A Spread + Commission S&P 500 Fees min. 0.4 spread Spread 0.25 over market Spread N/A Spread + Commission Options Fee N/A N/A N/A N/A N/A N/A Mutal Fund Fees N/A N/A N/A N/A N/A N/A ETF Fee N/A N/A 0.13% - 0.15% N/A N/A N/A.

What are Low Spread or Zero Spread Brokers?

The Lowest Spread brokers offer the lowest Forex Spreads or zero spreads. Trading costs declined over recent years as forex brokers compete to win more clients. Many offer zero spreads as an extra enticement, but it is essential to know the terms and conditions before choosing a broker. Our guide covers everything you need to know, so read on. Read more on spreads at Wikipedia.

The Lowest Spread for the EURUSD pair ranges from 0.1 – 0.9 pips with no commission charge . However, you should check all fees, including overnight, commissions, non-trading, deposit or withdrawal, and inactivity charges .

Compare Forex Costs per 100,000 Traded.

# Forex Broker Spread Pips on Major Forex Pairs * Established 1 Pepperstone Variable from 0.7 2010 2 AvaTrade Variable from 0.9 2006 3 FP Markets Variable from 1.4 2005 4 IC Markets Variable from 1.0 2007 5 Variable from 1.0 2006 6 FXTM Variable from 0.4 2011 *Subject to Change and Depends on Account type.

How to pick a Low-Spread Forex Broker?

Before you start trading, research your shortlisted brokers. While some forex brokers promise low dealing spreads, they might not be the best for your trading strategy.

You should watch out for these situations :

Be on the lookout for fixed spreads. This could mean that the spread is wider than average. The broker might also be trading against your positions as a market maker. Make sure the broker is regulated by a top-tier regulator. This adds an extra level of confidence in the ethical business practices of your broker. Make sure the minimum deposit isn't too high. Check the spreads on different currency pairs and account types. While some low spread brokers advertise low costs, spreads can vary depending on currency pairs or account types.

What is Spread in Forex?

The spread is the difference between the ask and bid price on a trade. A low value means that there is a small difference between the bid and the ask price of a currency pair. An increase usually means volatile market conditions or liquidity in the market. Spreads usually widen during less frequent trading hours, volatile times, or before news events.

The interbank market is where the prices originate from for most of the major brokers. Spreads are quoted as fractions of a pip (fractional pips).

The spread is how no-commission brokers make a profit. The cost is built into the bid-ask prices of each currency pair you trade. This is done instead of paying a commission fee per trade. While some brokers advertise lower spreads, they are more expensive because they charge higher commissions. Because spreads change during periods, it is best to calculate Average Spread data over a more extended period (monthly spread data) and commissions (spread + commission). That is how you avoid higher average spreads . You shouldn't look at the minimum spread but calculate the average.

How does Spread work in Forex?

The bid price is the exchange rate at which you are willing to sell a currency and the price a broker is willing to pay. The ask price is the price at which you buy the same currency and the price at which a broker is willing to sell it. The bid price is generally lower than the ask price. When you buy a Currency Pair from a broker, you buy the base currency and sell the Quote Currency. When you sell the currency pair, you sell the base and receive the quote currency. Currency pairs are quoted based on their bid and ask prices.

A currency quote is the value of one currency compared to another foreign currency. These two currencies are known as the base currency and the quote currency. The base currency is always the first currency listed. The second one listed is the quote currency.

How are spreads calculated?

Spreads are a key figure when determining your cost. There are two parts to how the spread is calculated. This price difference is calculated in pips. The width of the spread is based on factors such as trading volume, market volatility, and liquidity.

Pip stands for “percentage in points.” In Forex, 1 pip usually equals 1 point movement in market value. This is based on the fourth decimal place of your currency pair.

First , there is an interbank spread. This is the difference between the bank that wants to buy the currency at a set price and the selling bank's offer.

Second is the spread of the specific broker. Retail traders use brokers for order execution, so the broker adds a markup spread above the Raw Spread. The way forex and CFD brokers make money depends on the available execution methods and their business model.

To calculate it, you need to determine the difference between the buy and the sell price in pips. All you need to do is subtract the bid price of a currency pair from the ask price.

1 pip is equal to 0.0001 for most currency pairs.

An example of a 1 pip spread for USD/EUR would be 1.1061/1.1062.

How to Spread Bet in Forex?

Spread betting is only available in certain countries like the United Kingdom. A spread bet is where traders “bet” on the direction of the price, up or down. This way, spread betting brokers are a way to cut taxes for traders.

What is considered a good spread?

Spreads are considered good when they are as close to zero as possible. Those usually have an average of below 1 pip. An example of a good spread would be 0.5 pips for a currency pair. It is also important to base your calculations on average price data over an extended period.

What is the lowest spread in Forex?

A low spread is when the difference between the bid and ask price is small. It is best to trade when the spreads are low like during the major forex sessions. Low spread usually means that liquidity is high and volatility is low.

0 pips is the lowest spread (zero spread) in forex. 0 pips spreads are offered by ECN-STP brokers. To calculate which broker has lower spreads, it is essential to calculate all trading costs. While some brokers offer zero spreads, they still charge per-trade commissions, which could cost you more.

What is a zero-spread account?

Zero Spread Trading Account is a forex trading account with no difference between the bid and ask price or the spread is close to zero. Spreads can widen depending on the trading conditions, account type, and whether or not the broker charges commissions.

How To Compare Low Spread Accounts?

To compare low-spread forex accounts, you need to consider factors such as commissions per trade, spreads, trading platforms, regulation, security, and currency pairs offered.

Raw Spread Account vs. Standard Account.

In Forex, a Standard Account refers to a standard lot size, which is 100,000 units of currency. A Raw Spreads account refers to the cost where the broker doesn't add a price markup but offers the price directly from liquidity providers.

How does a good spread make a difference?

The lower the spread, the cheaper it is to place a trade order. A smaller spread means low trading costs. Incorporating tighter spread into your trading strategy is a key way to make higher profits.

On the other hand , make sure you check what other commissions your broker charges. Some charge higher commissions to make a profit.

Scalping and Spreads.

Finding a broker with low spreads is significant for scalping. Scalping is a strategy that involves profiting off of small price changes. As a result, traders make a high number of trades. Traders need fast order execution and a strict exit strategy as one significant loss could erase the many small gains.

Forex spreads 7

What Does a Forex Spread Tell Traders?

It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. In this article we explore how forex spreads work, and how to calculate costs and keep an eye on changes in the spread to maximize your trading success.

What is a spread in forex trading?

Every market has a spread and so does forex . A spread is simply defined as the price difference between where a trader may purchase or sell an underlying asset. Traders that are familiar with equities will synonymously call this the Bid: Ask spread.

Below we can see an example of the forex spread being calculated for the EUR/USD . First, we will find the buy price at 1.13398 and then subtract the sell price of 1.3404 . What we are left with after this process is a reading of .00006 . Traders should remember that the pip value is then identified on the EUR/USD as the 4th digit after the decimal, making the final spread calculated as 0.6 pips.

Now we know how to calculate the spread in pips, let’s look at the actual cost incurred by traders.

How to calculate the forex spread and costs.

Before we calculate the cost of a spread, remember that the spread is just the ask price less (minus) the bid price of a currency pair. So, in our example above, 1.13404-1.13398 = 0.00006 or 0.6 pips.

Using the quotes above, we know we can currently buy the EUR/USD at 1.13404 and close the transaction at a sell price of 1.13398. That means as soon as our trade is open, a trader would incur 0.6 pips of spread.

To find the total spread cost, we will now need to multiply this value by pip cost while considering the total amount of lots traded. When trading a 10k EUR/USD lot, you would incur a total cost of 0.00006 (0.6pips) X 10,000 (10k lot) = $0.6. If you were trading a standard lot (100,000 units of currency) your spread cost would be 0.00006pips (0.6pips) X 100,000 (1 standard lot) = $6.

If your account is denominated in another currency, like GBP, you would have to convert it to US Dollars.

Understanding a high spread and a low spread.

It’s important to note that the FX spread can vary over the course of the day, ranging between a ‘high spread’ and a ‘low spread’.

This is because the spread can be influenced by multiple factors like volatility or liquidity. You will notice that some currency pairs, like emerging market currency pairs , have a greater spread than major currency pairs . Your major currency pairs trade in higher volumes compared to emerging market currencies, and higher trade volumes tend to lead to lower spreads under normal conditions.

Additionally, it’s well known that liquidity can dry up and spreads can widen in the lead up to major news events and in between trading sessions .

Forex spreads 6

Understanding the Meaning of Forex Spread.

The Forex spread is a basic, but important, concept when it comes to trading. It should be a very familiar term to you if you trade on the Forex market regularly. If it is not, it is something that you must understand in order to become a successful trader. In this article, we will explain what a spread is, why it is important, how to measure it and much more!

The Forex Spread Meaning.

In the Forex and other financial markets, the spread is the difference between the purchase price and the sale price of an asset.

With online brokers, the purchase price is always higher than the sale price of an asset, meaning that if you opened a position and closed it straight away, you would make a loss exactly equal to the spread.

Therefore, when you open a trade, you need the market to move in your favour in an amount equivalent to the spread before you can start to potentially make profit.

For online brokers, the Forex spread is one of their main sources of income, along with commissions and swap fees. The spread can be fixed or variable, although most online brokers offer variable spreads.

How the Spread Is Measured.

In the FX market, a pip is the fourth digit after the decimal point in an exchange rate, and it is in pips that the Forex spread is measured.

For example, if GBP/USD is currently trading at 1.29300/1.29310, we see that the difference between these figures is 0.0001. Therefore, we can say that the spread is one pip.

The spread varies for each broker and also depends on volatility and volumes traded on an instrument. The EUR/USD is the most traded currency pair and usually enjoys the lowest spreads.

Admirals Spreads.

Admirals is a Forex broker that also gives you access to other financial markets. All our spreads can be found in the Contract Specification section of our website.

Here are some of our typically lowest spreads:

Trade Forex with Admirals.

Admirals provides the ability to trade with Forex and CFDs on up to 80+ currencies, with the latest market updates and technical analysis provided for FREE! Click the banner below to open your live account today!

Trade Forex & CFDs.

Get access to over 40 CFDs on currency pairs, 24/5.

How to Calculate the Value of the Spread in Forex.

As we have seen above, the Forex spread is measured in pips, but how can we translate this into a recognisable currency?

The cash value of the spread will depend on the size of the contract you are trading, as this determines the size of each pip.

In Forex, to calculate the pip value in the quote currency (the second listed currency in a pair) you multiply 0.0001 by the size of the contract.

For example, trading 1 lot of GBP/USD (100,000 units of GBP) would give a pip value of 10 USD (100,000 x 0.0001 in the second listed currency). Perhaps an easier way to look at this is that, for all currency pairs (except those which use the Japanese Yen), a contract size of 1 lot will give a pip value of 10 units of the quote currency.

For currency pairs quoted in the Japanese Yen, a pip is the second digit after the decimal point, meaning that the above calculation would use 0.01 instead of 0.0001.

Therefore, if we continue our example from the previous section, where we calculated that the spread equated to 1 pip, we can say that the cost of the spread for a trade size of 1 lot would have been 10 USD.

Factors that Influence the Spread in Trading.

The spread is influenced by the following factors:

The liquidity of the asset being traded Market conditions The volume traded of a financial instrument.

Spreads depend on the underlying asset which is being traded. The more an asset is traded, the more liquid its market is. The more liquid the market, the smaller, or "tighter", the spreads. In markets with low liquidity, or "thin" markets, such as the natural gas market, the spreads tend to be larger.

Spreads also vary according to market conditions. There are usually larger spreads during macroeconomic announcements and periods of high volatility.

If you are planning to trade at the same time the Federal Reserve is about to make an announcement, or the European Central Bank has a meeting scheduled, expect higher spreads.

We noted earlier that some brokers offer fixed spreads, however, it is important to note that during macroeconomic announcements and periods of high volatility, these brokers may not be able to guarantee their spreads remain fixed.

Finally, volume could have an impact on the spread. If your trade is so large that it moves the market against you, then the market maker is likely to adjust their spread to compensate for the additional risk they are taking. In practice, the FX markets are so liquid that retail trades are very unlikely to make an impact to the market price.

Spread-Free Trading.

Is it possible to trade without Forex spreads?

At Admirals, our Zero.MT5 account offers spreads starting from zero! Commission is charged at up to $6 per contract: $3 to open the position and $3 to close.

We have already noted that spreads vary from broker to broker. However, you should be careful with advertisements promising accounts with low, or no, spreads and no brokerage fees. There are trading scams which promise such accounts in order to get you to deposit money with them, money that you may have a difficult time getting back.

Brokerage fees are a broker's source of remuneration and this money can be used for future development and improvement of their trading services and platform. So it is not always the best idea to look for the cheapest solution, but rather to look for the broker with the best price to quality ratio.

How to View the Spread in MetaTrader 5.

In order to view the spread in MetaTrader 5, you will firstly need to download it! Fortunately for you, with Admirals, you can download MetaTrader 5, the world's number 1 multi-asset trading platform, absolutely free! Click the banner below to start your download:

The World's Premier Multi Asset Platform.

Once downloaded, open your MetaTrader 5 trading platform and head to the "Market Watch" section on the left hand side of your screen. If it is not there already, press Control + M on your keyboard to make it appear.

Right click in the Market Watch window, scroll down to "Columns" and from here select "Spread". A new column will appear on the right in the window which displays the difference in value between the Bid and the Ask quotes for each trading instrument.

Depicted: Admirals MetaTrader 5 - Market Watch.

Alternatively, if you want a visual representation of the current spread, open a price chart, right click and select "Properties". In the resulting dialogue box, select the "Show" tab and then select "Show Bid Price" and "Show Ask Price".

Once accepted, this will display two lines demonstrating each current price, the gap between them being the Forex spread. Below, the Ask Price line is red and the Bid Price line is green.

Depicted: Admirals MetaTrader 5 - GBPJPY M1 Chart. Date Shown: 7 October 2022. Captured: 7 October 2022. Past performance is not necessarily an indication of future performance.

Viewing the Spread with MetaTrader Supreme Edition.

MetaTrader Supreme Edition (MTSE) is an add-on for both MetaTrader 4 and MetaTrader 5 developed by professionals exclusively for Admirals.

With the MTSE add-on, there are additional, and better, ways in which to view the spread for the instrument you are trading:

The Admiral Mini Terminal Expert Advisor The Admiral Spread Recorder Indicator.

The Admiral Mini Terminal.

As well as being a useful tool for quickly creating market positions, the Admiral Mini Terminal also allows you to easily see the current spread for the price chart you are viewing.

The Mini Terminal can be found in the "Navigator" window, under "Expert Advisors", as shown below.

Source: Admirals MetaTrader 5 Supreme Edition - Expert Advisors.

Once located, click on the Admiral Mini Terminal and then drag it onto your open price chart and click "OK" on the subsequent dialogue box.

Depicted: Admirals MetaTrader 5 Supreme Edition - Mini Terminal.

Between the "Sell" and "Buy" prices, the real time pip value of the Forex spread is displayed in white.

The Admiral Spread Recorder Indicator.

The Admirals MTSE add-on comes with a whole variety of extra technical indicators which are not included as part of the standard MetaTrader 5 platform. One such indicator is the Admiral Spread Recorder.

The Admiral Spread Recorder is an indicator which, once applied to a price chart, shows the current spread, but also records the following information about the spread for each time period:

Depicted: Admirals MetaTrader 5 Supreme Edition - Spread Recorder Indicator.

As well as being aware of the current spread - where the spread is variable, it can be both interesting and helpful for a trader to have a picture of whether the spread deviates greatly in periods of market volatility.

Whilst open, this indicator continuously records the values of the spread, allowing the trader to go back through the price chart and analyse the information.

Just as with the Admiral Mini Terminal, in order to add the Spread Recorder Indicator to your chart, head to the "Navigator" window, only this time select "Indicators". Then locate the "Admiral Spread Recorder" and click and drag onto your open price chart.

Depicted: Admirals MetaTrader 5 Supreme Edition - Indicators.

As shown below, the indicator appears underneath the main price chart. By default, the maximum and minimum spread for each time period is indicated by the green line, whereas the average is shown by the yellow circle. The current spread is shown on the right hand side of the indicator and highlighted in blue.

Depicted: Admirals MetaTrader 5 Supreme Edition - GBPUSD M1 Chart. Date Shown: 7 October 2022. Captured: 7 October 2022. Past performance is not necessarily an indicator of future performance.

Both these functions, and many more, are available with the Admirals MetaTrader Supreme Edition add-on. In order to download your FREE copy, click the banner below!

The exclusive MetaTrader Supreme Edition.

Download the most powerful plugin suite for your favourite trading platform!

The Importance of the Spread When Trading.

Anyone who wants to become a Forex trader has to decide which style of trading works best for them. Do you prefer to scalp the markets, holding positions for just minutes or even seconds? Or perhaps trading with a longer timeframe?

Each trader will have a different degree of sensitivity to the cost of the spread depending on the trading style and strategy which they adopt.

For day traders, such as scalpers, the spread is a very important factor to consider when trading. Because these types of traders are required to enter the market on numerous occasions throughout the day, if the spread is too high it can severely impact their potential profits.

The longer the term which you trade, the less impact the spread will have on your profits. For example, for a swing trader, who is looking to accumulate a larger profit over days, weeks or even months, the spread will have little impact on them when compared to the size of the market movements which they are hoping for.

Traders who enter and exit the market regularly can see spread costs add up. If this sounds like your trading style, you need to ensure you are placing your orders at times when the spread size is optimal.

When trading with technical indicators, it is usually a good idea to use additional indicators to confirm the signals supplied by your main indicator. For traders who enter the market frequently, a spread indicator can be used as a "final filter" before entering the market, to ensure that you are not entering at a bad time for spreads.

Trade Risk-Free with an Admirals Demo Account.

Traders that choose Admirals will be pleased to know that they can trade completely risk-free with a FREE demo trading account. Instead of heading straight to the live markets and putting your capital at risk, you can avoid the risk altogether and simply practice until you are ready to transition to live trading. Take control of your trading experience, click the banner below to open your FREE demo account today!

Trade with a risk-free demo account.

Practise trading with virtual funds.

Other articles that may interest you:

Investing in Precious Metals: A complete guide Market liquidity - What are liquid markets? Forex Trading for Beginners.

About Admirals.

Admirals is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

An all-in-one solution for spending, investing, and managing your money.

More than a broker, Admirals is a financial hub, offering a wide range of financial products and services. We make it possible to approach personal finance through an all-in-one solution for investing, spending, and managing money.

Meet Admirals on.

Start Trading!

Sign up for our Risk Free Demo Account to practise trading. Ready to go live? Open a Live Account and get started.

OPEN A LIVE ACCOUNT Open a Demo Account.


January 06, 2023.

19 Min read.

To be honest, everyone is looking for passive income streams. With the cost of living seemingly rising every year, so do individuals’ responsibilities and goals. Maybe you want to buy a new home, pay for your children's education, get your next dream car, or simply go on vacation and travel the worl.

January 06, 2023.

22 Min read.

At the beginning of their trading career, many aspiring traders will have trouble wrapping their mind around how trading Forex works, or if it works at all. These questions point to the very heart of the problem – although they are taking the wrong approach in terms of addressing it. Table of Conte.

January 05, 2023.

27 Min read.

A popular form of trading which you may be aware of is trading on Foreign exchange, or Foreign currency. This is known, in short, as Forex. With numerous currency pairs in existence to trade, what about the strategy you put in place while trading? Day trading is a trading strategy which is one of th.

Invest in Stocks & ETFs Demo Trading Account Trading Calculator Account Types Deposits & Withdrawals Fractional Shares Islamic Forex Account Documents & Policies Personal Offer.

MetaTrader 5 MetaTrader 4 MetaTrader WebTrader Admirals Mobile App MetaTrader Supreme Edition StereoTrader Virtual Private Server Parallels for MAC.

Forex Calendar Trading News Global Market Updates Premium Analytics Weekly Trading Podcast Fundamental Analysis Market Heat Map Market Sentiment Trading Central.

Affiliate Program Introducing Business Partner White Label partnership Refer a friend.

Why Admirals? Financial Security Secure your trading account Contact Admirals Company News Rebranding Admirals is green Careers.

Risk warning: Trading Forex (foreign exchange) or CFDs (contracts for difference) on margin carries a high level of risk and may not be suitable for all investors. There is a possibility that you may sustain a loss equal to or greater than your entire investment. Therefore, you should not invest or risk money that you cannot afford to lose. Before using Admiral Markets UK Ltd, Admiral Markets Cyprus Ltd, Admiral Markets AS Jordan Ltd, Admirals AU Pty Ltd and Admirals SA (PTY) Ltd services, please acknowledge all of the risks associated with trading.

The content of this website must not be construed as personal advice. We recommend that you seek advice from an independent financial advisor.

All references on this site to ‘Admirals’ refer jointly to Admiral Markets UK Ltd, Admiral Markets Cyprus Ltd, Admiral Markets AS Jordan Ltd, Admirals AU Pty Ltd and Admirals SA (PTY) Ltd. Admirals’ investment firms are fully owned by Admirals Group AS.

Product offer may differ depending on the regulatory requirements of each Operating Company.

Admiral Markets UK Ltd is registered in England and Wales under Companies House – registration number 08171762. Admiral Markets UK Ltd is authorised and regulated by the Financial Conduct Authority (FCA) – registration number 595450. The registered office for Admiral Markets UK Ltd is: 37th Floor, One Canada Square, Canary Wharf, London, E14 5AB, United Kingdom.

Admiral Markets Cyprus Ltd is registered in Cyprus – with company registration number 310328 at the Department of the Registrar of Companies and Official Receiver. Admiral Markets Cyprus Ltd authorised and regulated by the Cyprus Securities and Exchange Commission (CySEC), license number 201/13. The registered office for Admiral Markets Cyprus Ltd is: Dramas 2, 1st floor, 1077 Nicosia, Cyprus.

Admirals AU Pty Ltd Registered Office: Level 1, 17 Castlereagh Street, Sydney, NSW 2000, Australia. Admirals AU Pty Ltd (ABN 63 151 613 839) holds an Australian Financial Services Licence (AFSL) to carry on financial services business in Australia, limited to the financial services covered by its AFSL no. 410681.

Admiral Markets AS Jordan Ltd is authorised and regulated to conduct investment business by the Jordan Securities Commission (JSC) in the Hashemite Kingdom of Jordan, registration number 57026. The registered office of Admiral Markets AS Jordan Ltd is first floor, Time Centre Building, Eritrea Street, Um Uthaina, Amman, Jordan.

Admirals SA (Pty) Ltd is registered in South Africa with the Companies and Intellectual Property Commission (CIPC) – registration number - 2022 / 620981 / 07. Admirals SA (Pty) Ltd is an authorised financial services provider (FSP51311) registered at the Financial Sector Conduct Authority. The registered office for Admirals SA (Pty) Ltd is: Dock Road Junction, CNR Dock Road and Stanley Street, V&A Waterfront, Cape Town, Western Cape, 8001, South Africa.

Privacy Policy Client Complaints Handling Procedure.

Forex spreads 5

Understanding the Forex Spread.

John Russell is an expert in domestic and foreign markets and forex trading. He has a background in management consulting, database administration, and website planning. Today, he is the owner and lead developer of development agency JSWeb Solutions, which provides custom web design and web hosting for small businesses and professionals.

Updated on December 17, 2021.

Reviewed by.

Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics.

In This Article.

In This Article.

filadendron / Getty Images.

To better understand the forex spread and how it affects you, you must understand the general structure of any forex trade. One way of looking at the trade structure is that all trades are conducted through intermediaries who charge for their services.

This charge—which is the trade's difference between the bidding and the asking price—is called the "spread."

Key Takeaways.

TA forex spread is determined when a facilitator finds a buyer and seller for a pair and adjusts the price slightly on each side. The spread is a transaction fee paid to the facilitator for their services. It is often lower at busy trading times.

The Bid-Ask Spread Defined.

The forex spread represents two prices: the buying (bid) price for a given currency pair, and the selling (ask) price. Traders pay a certain price to buy the currency and have to sell it for less if they want to sell back it right away.

For a simple analogy, consider that when you purchase a brand-new car, you pay the market price for it. The minute you drive it off the lot, the car depreciates, and if you wanted to turn around and sell it right back to the dealer, you would have to take less money for it.

Depreciation accounts for the difference in the car example, while the dealer's profit accounts for the difference in a forex trade.

Forex Market Makers Determine the Spread.

The forex market differs from the New York Stock Exchange, where trading historically took place in a physical space. The forex market has always been virtual and functions more like the over-the-counter market for smaller stocks, where trades are facilitated by specialists called "market makers."

The buyer may be in London, and the seller may be in Tokyo—an intermediary is needed to coordinate the transaction.

The specialist, one of several who facilitates a particular currency trade, may even be in a third city. His responsibilities are to assure an orderly flow of buy and sell orders for those currencies, which involves finding a seller for every buyer and vice versa.

In practice, the specialist's work involves some degree of risk. It can happen, for example, that they accept a bid or buy order at a given price, but before finding a seller, the currency's value increases.

The specialist is still responsible for filling the accepted buy order and may have to accept a higher sell order than the buy order they have committed to filling.


In most cases, the change in value will be slight, and the market maker will still make a profit.

As a result of accepting the risk and facilitating the trade, the market maker retains a part of every trade. The portion they keep is called the "spread."

A Sample Calculation.

Every forex trade involves two currencies called a currency pair. This example uses the British Pound (GBP) and the U.S. dollar (USD)—or the GBP/USD currency pair. Suppose that, at a given time, the GBP is worth 1.1532 times the USD.

You may believe the GBP will rise against the dollar, so you buy the GBP/USD pair at the asking price.

The asking price for the currency pair won't exactly be 1.1532. It will be a little more, perhaps 1.1534—which is the price you will pay for the trade. Meanwhile, the seller on the other side of the trade won't receive the full 1.1532 either. They will get a little less, perhaps 1.530.

The difference between the bid and ask prices—in this instance, 0.0004—is the spread.


The spread may not seem like much, but .0004 profit equates to four pips, or $40 profit for a standard lot of EUR/USD. The facilitator can assist in thousands of these trades per day.

The Cost of the Spread.

Using the example above, the spread of 0.0004 British Pound (GBP) doesn't sound like much, but even a tiny spread quickly adds up as a trade gets larger. Currency trades in forex typically involve larger amounts of money.

As a retail trader, you may be trading only one 10,000-unit lot of GBP/USD. But the average trade is much larger, around one million units of GBP/USD. The 0.0004 spread in this larger trade is 400 GBP, which is a much more significant commission.

How to Manage and Minimize the Spread.

You have two ways of minimizing the cost of these spreads:

Trade only during the most favorable trading hours, when many buyers and sellers are in the market. As the number of buyers and sellers for a given currency pair increases, competition and demand for the business increase, and market makers often narrow their spreads to capture it.

Avoid buying or selling thinly traded currencies. Multiple market makers compete for business when you trade popular currencies, such as the GBP/USD pair. If you trade a thinly traded currency pair, there may be only a few market makers to accept the trade. Reflecting on the lessened competition, they will maintain a wider spread.

Frequently Asked Questions (FAQs)

What's a good spread in forex?

You can watch the most liquid forex parings to get a sense of what a good spread is in forex. USD/JPY and USD/GBP are popular forex pairs. You might compare those pairings' spreads to other pairings. It might also help to compare the spreads between brokerages to ensure you're getting the best deal.

What does a high spread mean in forex?

High spreads suggest that a pairing is less liquid than other pairs. In other words, fewer traders and fewer dollars are focusing on the pair. The fewer traders focusing on a pair, the less likely it is that someone is willing to offer a price that's closer to the opposing side of the trade. When trading happens less frequently, the spread increases. Brokerages may also include trading fees in the spread, even if it markets itself as a "commission-free" trading platform.

Forex spreads 4

Best Zero Spread Forex Brokers in 2023.

The annual forex broker review (six years running) is the most cited in the industry. With over 50,000 words of research across the site, we spend hundreds of hours testing forex brokers each year. Here's how we test.

Trading costs continue to decline each year as forex brokers compete to win you as a client, and many now offer zero spread trading accounts as an extra enticement.

Be aware: Some zero spread account offerings can be marketing gimmicks to lure you in as a trader. It's therefore important to be able to read the fine print and understand what to look for when deciding which broker to choose. This guide covers the best zero spread forex brokers and explains what you need to know to choose the best option for your needs.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 65% and 82% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

What is a zero spread account?

Zero spread accounts are trading accounts offered by brokers that have no difference between the bid and ask price, or spreads that average close to zero. However, there still exists the potential for spreads to widen, and there can still be added trading costs (commissions, for example) depending on the broker and account you choose.

Trading with a zero spread account makes it easy to enter and exit a trade without the need to worry about incurring trading costs, provided there are no additional commissions or fees.

Note: Even if there is a commission instead of spread, accounting can be easier when you know there was no spread when calculating trading costs, as commissions are usually shown on a separate column in most brokerage account reports.

Lowest Spread Forex Brokers.

Here are the best zero spread accounts, including brokers that offer spreads close to zero, available for 2023, based on 113 variables.

Best overall for low costs.

Minimum Initial Deposit $100 Trust Score 82 Tradeable Symbols (Total) 295.

Of Tickmill’s three accounts (Classic, Pro, and VIP), it was the competitive commission-based pricing for professionals available through its VIP and PRO accounts that helped the broker finish 1st overall for Commissions and Fees again in our 2022 annual review. Read full review.

Highly competitive pricing Above-average research and education offerings Small range of markets available for trading.

Spreads as low as 0.0 pips.

(76% of retail CFD accounts lose money)

Best web trading platform, consistent pricing.

Minimum Initial Deposit $0 Trust Score 99 Tradeable Symbols (Total) 12377.

CMC Markets is a low-cost leader that features consistently low spreads for all customer segments and account types, and competitive pricing for active traders – though the availability of discounts and rebate programs will depend on your country of residence. Read full review.

Low trading costs Excellent web and mobile platforms Robust research materials Educational offering could be improved.

Best for professionals, excellent pricing.

Minimum Initial Deposit $0 Trust Score 99 Tradeable Symbols (Total) 8500.

Interactive Brokers is a highly trusted multi-asset broker with an extensive offering of tradeable global markets and competitive fees – though given the minimum commission of $2 per side, trading anything less than 100,000 units of currency becomes proportionally more expensive. Read full review.

Robust platform for professional traders Wide range of global markets Thorough research offering Trader Workstation platform is likely too complicated for inexperienced traders.

Quotes as tight as 1/10 of a pip.

(66% of retail CFD accounts lose money)

Great for beginners, competitive pricing.

Minimum Initial Deposit $20 Trust Score 77 Tradeable Symbols (Total) 6000. stands out for its quality research, strong educational content, and innovative web platform. holds fewer regulatory licenses and offers a narrower range of markets than some of the best brokers, but still significantly outperforms the industry average. Read full review.

High-quality educational articles and courses Newsroom-grade research articles Offers over 400 crypto CFDs MetaTrader 5 not available Respectable range of tradeable symbols, but fewer than industry leaders.

CFDs on 3,700+ markets.

(87.41% of retail CFD accounts lose money)

Great for MetaTrader, low average spreads.

Minimum Initial Deposit $200 Trust Score 86 Tradeable Symbols (Total) 3583.

IC Markets offers competitive pricing across all account types, with low average spreads and modest minimum deposit requirements. Further discounts are also available for traders that trade over 100 standard lots per month. Read full review.

No. 1 MetaTrader broker for 2022 Excellent automated copy trading strategies Competitive pricing Research and education are limited Regulated primarily by one Tier-1 regulator (in Australia)

(74-89% of retail CFD accounts lose money)

Full MetaTrader suite, competitive pricing.

Minimum Initial Deposit $100 AUD Trust Score 86 Tradeable Symbols (Total) 9956.

FP Markets shines as a low-cost broker for trading forex and CFDs – as long as you use the MetaTrader platform. Ultra-competitive spreads are also available by way of its commission-based Raw ECN account. Read full review.

Very competitive spreads Industry-leading pricing on MetaTrader Room for improvement in education Mobile trading app lacks features offered by industry leaders.

Trade on highly competitive interbank.

(Retail CFD accounts lose money)

Excellent education, great active trader pricing.

Minimum Initial Deposit £250.00 Trust Score 99 Tradeable Symbols (Total) 19537.

IG’s fantastic all-around experience has us ranking IG as the best overall broker for our 2022 annual review. While we wouldn’t consider IG a discount broker, it shines for the active trader pricing available through its Forex Direct accounts. Read full review.

Outstanding platforms and tools Over 19,000 tradeable instruments Competitive pricing No predefined layouts on the flagship web platform Limited product range on MT4.

(77% of retail CFD accounts lose money)

Is there a broker with 0 spread?

While many brokers advertise zero spreads, it can be misleading to look only at the minimum spread or the lowest spread of the day -- it's possible that the spread is worse (higher) the majority of the time.

That is why it is important to only trust the average spreads to determine the true cost of a broker claiming to offer zero-pip spreads. A zero spread implies there is no difference in pips between the bid price and ask price; they are exactly the same price when the spread is 0.

In our research, there are only a few brokers that truly average close-to-zero-pip spreads on the EUR/USD, but you still must pay a per-trade commission, thus the effective spreads average out to be higher. Any broker claiming to offer zero pips with no commissions should be considered carefully, as it could turn out to be either a scam or offer questionable execution practices. That's why it's always important to only use trusted, highly regulated brokers.

For example, Tickmill, FP Markets, and IC Markets feature spreads close to 0 for their commission-based accounts, with their effective spreads averaging anywhere from 0.42 to 0.62 on the EUR/USD pair (using monthly spread data obtained during our 2023 annual review), helping them finish best in class in this category.

How do you compare zero spread accounts?

When you compare accounts offered by the best forex brokers for zero spread trading, spreads will still vary in most cases, and you may incur other trading costs such as commissions. Therefore, it is essential to keep the subtle details in mind when reading the fine print for zero spread trading.

Forex brokers often offer multiple accounts, where certain features such as the execution method, the trading platform available, or the range of markets will vary depending on which account you select.

Whether you are trading spot forex as a CFD or as a non-deliverable rolling contract, this guide covers some of the key takeaways for trading forex on margin with a zero spread broker. If you are interested in learning more about CFDs (and you want to read about our favorite CFD trading platforms), check out our guide to the Best CFD Brokers and Trading Platforms.

Should I choose a zero spread account?

An account with zero spreads can make sense if your trading strategy is spread-sensitive or if you just want to reduce your trading costs as much as possible -- but there are potential trade-offs.

Factors to keep in mind include any added commission and knowing if zero spreads are variable or fixed, especially during volatile market conditions when spreads may widen.

Consider that execution quality can suffer in a zero spread account if your trading strategy relies on specific execution qualities, such as avoiding slippage (where your order can get filled at a worse price).

Pros of zero spread pricing: A scalping strategy or other high-frequency trading program based solely on latency, or price delays that cause arbitrage, will likely require that you have lower costs (i.e., cost-sensitive) to be profitable. Cons of zero spread pricing: Conversely, other high-frequency algorithmic trading based on technical indicators can perform better on zero spreads, even if there are execution delays or price requotes during fast markets. However, this potential slippage also means that the effective spread can be greater than zero if your order is filled at a worse price.

About zero spread forex brokers.

A zero spread forex broker attempts to offer a spread of zero pips. The spread is the difference between the bid price (where you can sell) and the ask price (where you can buy), measured in pips (fractions of a currency). These seemingly small trading costs can quickly add up, because trading forex takes place from within a margin account (that is, uses leverage), especially as your trading volumes increase.

Sample EUR/USD spread 10 years ago: 3 pips Sample EUR/USD spread today: 0.8 pips Sample EUR/USD spread at a zero spread broker: 0.1 pips.

In the interbank market, where prices originate from major dealers, spreads are quoted in fractions of a pip, also known as fractional-pips. A zero pip spread may range from 0 to several fractions of a pip -- or even more during volatile market conditions.

Zero spread investment offerings comparison.

Using our forex brokers comparison tool, here's a summary of the spread pricing offered by the best zero spread forex brokers.

Company Average Spread EUR/USD - Standard All-in Cost EUR/USD - Active Active Trader or VIP Discounts Execution: Agency Broker Execution: Market Maker IG 0.86 (September 2022) 0.5957 (September 2022) Yes Yes Yes Interactive Brokers 0.6 (Aug 2022) 0.6 (Aug 2022) Yes Yes No CMC Markets 0.51 (August 2022) 0.51 (August 2022) Yes No Yes FP Markets 1.2 (August 2022) 0.7 (August 2022) Yes No Yes IC Markets 0.62 (August 2021) 0.62 (August 2021) Yes Yes Yes Tickmill 0.51 (August 2022) 0.31 (August 2022) Yes Yes Yes HYCM (Henyep) 0.6 (Sept 2021) 0.6 (Sept 2021) Yes Yes Yes.

Note: Brokers listed in the above table ranked best in class for Commissions & Fees in the 2023 review.

How does a zero spread forex broker earn money?

A zero-pip spread that is fixed, and doesn't vary, will likely include a commission. The broker may also be operating a dealing desk to attempt to make money when you trade, by being on the opposite side of each trade.

The way forex and CFD brokers earn money depends on their business model and available execution methods. All brokers will ultimately do one or more of the following:

Add a spread markup or earn a rebate (agency broker) when you trade with them, as they route your order to a third-party market-maker in return for compensation. Charge a commission (agency broker) in lieu of any spreads when routing your order. Manage risk as a dealer (agency broker or market maker) on zero spread accounts.

Pro tip: Some zero spread brokers combine some of these execution methods into a hybrid offering. Some brokers let you choose execution type from within your account or open an account specific to a particular execution method.

Which broker has lower spreads?

In order to really know which broker has lower spreads compared to the competition, we obtained average spread data and factored in any per-trade commissions to arrive at the effective spreads, which allow you to determine your true trading costs.

Brokers with the lowest effective spreads in 2023 are as follows, based on average price data obtained by our research for the EUR/USD pair:

Tickmill - 0.47 (September 2021) on Pro account FP Markets - on 0.7 (October 2021) Raw ECN account CMC Markets - 0.73 (August 2021) on all accounts IC Markets - Average 0.62 (August 2021) on cTrader account HYCM - Average 0.6 pips (September 2021) on Raw account Interactive Brokers - 0.6 pips (Week ending Oct. 6, 2021) IG - Deeper discounts on Forex Direct account.

currency exchange Pro tip:

Read our guide to the best forex brokers to see how these low-cost brokers stack up to the best brokers in the industry, and check out our guide to the best forex trading apps to see which low-cost brokers deliver the best mobile trading experience.

Which forex broker has the tightest spread?

Tickmill provides the tightest spreads (averaging 0.13 pips on the EUR/USD during August) from among the 39 brokers ranked in the 2023 Annual Broker Review, after factoring in trading costs (i.e., any commissions). FP Markets follows closely in second place, also offering a nearly zero pip spread with a small commission added per trade.

Pro tip: When measuring forex spreads, the most accurate way to determine which broker has the tightest spread is to calculate the average spread for a given period -- such as one month. In addition, it is important to factor in the trustworthiness of the broker, to ensure you are provided with the best execution to pay the spread you deserve and avoid pitfalls like asymmetrical slippage.

Which broker has the best spread?

Tickmill stands out as having the best spread, as the overall trading cost (spread + commission) is 0.47 pips, which is the lowest on average based on September 2021 data using the EUR/USD pair on its Pro account offering. Other brokers might advertise a lower spread, but end up being more expensive because they charge a higher commission or have higher average spreads.

Is a zero spread account good?

While it's nice to avoid fees, a zero spread account can still end up costing you a per-trade commission, and even worse -- spreads can potentially widen in a zero spread account even if it is commission-free.

Depending on your strategy and trading needs, a zero spread account might not be good for you if certain order types or execution methods are not available. The key is knowing what the average spreads are, and whether there are any per-trade commissions -- this allows you to calculate the effective spread.

Can I trade forex without a broker?

No, forex trading is conducted from within a brokerage account, which provides you a certain degree of leverage (margin), along with access to a trading platform and a range of currency pairs. You should always choose trusted forex brokers that hold proper regulatory licenses to avoid becoming a victim of scams.

Pro tip: For cryptocurrency users looking at forex trading with stablecoins, a decentralized exchange is also not a suitable option for forex. Spreads can be significantly wider, and there is no mechanism to ensure the best execution even if zero spreads are advertised -- which could result in extreme slippage.

Which forex broker is best for scalping?

IC Markets is an excellent forex broker for scalping, and provides zero spreads (plus commission) via its Raw Spread Account. IC Markets is used by a significant number of algorithmic traders and provides access to cTrader and MetaTrader. These platforms allow you to run automated high-frequency trading programs such as scalping-based strategies and can even place orders in between the spread. If you want to learn more about algorithmic trading and automated high-frequency trading systems, check out our guide to high-frequency trading.

Pro tip: Whether brokers claim to offer Straight Through Processing (STP) or an Electronic Communications Network (ECN), these descriptions are not as important as how your broker's business model actually operates, including its order execution policy during fast markets when spreads can widen.

What's the difference between raw spread and a standard account?

A standard account refers to the smallest trade size of 100,000 units of currency, which is also known as a standard lot size. A raw spread refers to the cost of trading reflected in the bid/ask price, where the broker is not adding any markup but instead provides the price as is (i.e., raw spread) straight from their liquidity providers.

Pro tip: In most cases, raw spread forex brokers will add a per-trade commission to make money or act as market makers. 2023 Overall Ranking.

Here are the Overall rankings for the 60+ online brokers who participated in our 2023 Annual Review, sorted by Overall ranking.

Company Overall Rating Offering of Investments Commissions & Fees Platform & Tools Research Education Mobile Trading Trust Score Visit Site IG 99 Visit Site.

Melhores Corretoras Negociação forex

Calculadora de valor de pip.

Use nossa prática calculadora de valor de pip para calcular com precisão o valor do(s) pip(s) de Forex por par de divisas de forma rápida e fácil.

O que são pips em Forex?

Um Pip em Forex significa a menor variação de preço que um par de divisas pode fazer, exceto para frações de Pips, chamadas de "pipettes".

Para a maioria dos pares de divisas 1 Pip é 0,0001; para pares de divisas com o iene japonês como USD/JPY 1 Pip é 0,01. No comércio de metais, 1 Pip para ouro e prata é 0,01.

Quando o par EUR/USD aumenta de 1.0925 para 1.0926, a mudança é de 1 Pip. Com uma cotação de 5 dígitos, se o EUR/USD subir de 1,09255 para 1,09260, a mudança é metade de um Pip.

Como usar esta calculadora de valor de pip.

Instrumento : Os traders podem selecionar entre as principais divisas, pares menores, as criptomoedas mais populares (BTC, ETH, LTC, Stellar e Ripple) contra o USD ou Ouro/Prata contra o USD. Vamos escolher, por exemplo, o EUR/USD. Tamanho comercial : Os pares Forex são 100.000 unidades por 1 lote, mas as unidades por 1 lote variam em pares não Forex. Neste campo há a opção de calcular o valor do pip com base nos lotes negociados ou nas unidades negociadas. Vamos escolher, em nosso exemplo, um lote de tamanho comercial de 10.000 unidades (0,10 mini lote). Moeda de depósito : Como os valores de pip são diferentes para cada par FX e para cada criptomoeda e sujeitos à cotação atual de mercado de um cross, ao selecionar este campo, será possível exibir com precisão o valor do pip do instrumento selecionado na moeda base da conta do trader (de AUD a ZAR). Escolhemos o EUR como moeda de depósito, para nosso exemplo. Agora, clicamos o botão "Calcule". Resultados : A calculadora de valor de pip usa feed ao vivo com a taxa interbancária atual (no formato de 5 dígitos) e exibirá o valor atual do pip baseado na divisa base da conta selecionada (em nosso exemplo, o EUR). Portanto, o valor do pip para um lote de 0,10 EUR/USD, com uma taxa de mercado de 1,21580, em uma conta de negociação em EUR, é atualmente de 0,8225 EUR. É importante observar que para contas de negociação em outras divisas, como GBP ou AUD, o valor do pip pode variar, dependendo da taxa de mercado atual para o GBP/USD, ou AUD/USD, por exemplo. A seguinte fórmula de conversão é aplicada para calcular o valor do pip em outras divisas:

Valor do pip = (Um pip / Taxa de câmbio) * Tamanho do lote.

O resultado seria:

Valor do pip = (0,0001 / 1,21580) * 10.000 = 0,8225 euros.

Embutir esta calculadora de valor de pip em seu site.

Nossas ferramentas e calculadoras são projetadas e construídas para ajudar a comunidade de traders a entender melhor as particularidades que podem afetar o balanço de suas contas e suas negociações em geral.

Independentemente de se o investidor negociar no mercado Forex ou qualquer outro instrumento financeiro, nosso conjunto completo de ferramentas e calculadoras de Forex está planejado para funcionar com quaisquer dados inseridos.

Se você é um webmaster e considera que esta ferramenta/calculadora pode ser de utilidade para o seu site, por favor sinta-se à vontade para usá-la.

O widget de incorporação pode ser usado como se encontra ou pode ser totalmente configurado para combinar com as cores do seu site. Quando você estiver satisfeito com as configurações, basta copiar/colar o código final para embutir o widget ferramenta/calculadora na sua página.

Forex spreads 3

What is a Spread in Forex Trading?

Forex brokers will quote you two different prices for a currency pair: the bid and ask price.

The “ bid ” is the price at which you can SELL the base currency.

The “ ask ” is the price at which you can BUY the base currency.

The difference between these two prices is known as the spread .

The spread is how “no commission” brokers make their money.

This spread is the fee for providing transaction immediacy . This is why the terms “transaction cost” and “ bid-ask spread” are used interchangeably.

Instead of charging a separate fee for making a trade, the cost is built into the buy and sell price of the currency pair you want to trade.

From a business standpoint, this makes sense. The broker provides a service and has to make money somehow.

They make money by selling the currency to you for more than they paid to buy it . And they also make money by buying the currency from you for less than they will receive when they sell it . This difference is called the spread .

It’s just like if you were trying to sell your old iPhone to a store that buys used iPhones. (A smartphone with only two rear cameras? Yuck!)

In order to make a profit, it will need to buy your iPhone at a price lower than the price it’ll sell it for .

If it can sell the iPhone for $500, then if it wants to make any money, the most it can buy from you is $499.

That difference of $1 is the spread .

So when a broker claims “zero commissions” or “no commission”, it’s misleading because while there is no separate commission fee, you still pay a commission.

It’s just built into the bid/ask spread!

How is the Spread in Forex Trading Measured?

The spread is usually measured in pips , which is the smallest unit of the price movement of a currency pair.

For most currency pairs, one pip is equal to 0.0001 .

An example of a 2 pip spread for EUR/USD would be 1.1051/1.105 3 .

Currency pairs involving the Japanese yen are quoted to only 2 decimal places (unless there are fractional pips, then it’s 3 decimals).

For example, USD/JPY would be 110.0 0 /110.0 4 . This quote indicates a spread of 4 pips .

What Types of Spreads are in Forex?

The type of spreads that you’ll see on a trading platform depends on the forex broker and how they make money.

There are two types of spreads:

Fixed spreads are usually offered by brokers that operate as a market maker or “dealing desk” model while variable spreads are offered by brokers operating a “non-dealing desk” model.

What are Fixed Spreads in Forex?

Fixed spreads stay the same regardless of what market conditions are at any given time. In other words, whether the market is volatile like Kanye’s moods or quiet as a mouse, the spread is not affected. It stays the same.

Fixed spreads are offered by brokers that operate as a market maker or “dealing desk” model.

Using a dealing desk, the broker buys large positions from their liquidity provider(s) and offers these positions in smaller sizes to traders.

This means that the broker acts as the counterparty to their clients’ trades.

Having a dealing desk, allows the forex broker to offer fixed spreads because they are able to control the prices they display to their clients.

What are the Advantages of Trading With Fixed Spreads?

Fixed spreads have smaller capital requirements, so trading with fixed spreads offers a cheaper alternative for traders who don’t have a lot of money to start trading with.

Trading with fixed spreads also makes calculating transaction costs more predictable.

Since spreads never change, you’re always sure of what you can expect to pay when you open a trade.

What are the Disadvantages of Trading With Fixed Spreads?

Requotes can occur frequently when trading with fixed spreads since pricing is coming from just one source (your broker).

And by frequently, we mean almost as frequently as Instagram posts from Kardashian sisters!

There will be times when the forex market is volatile and prices are rapidly changing. Since spreads are fixed, the broker won’t be able to widen the spread to adjust for current market conditions.

So if you try to enter a trade at a specific price, the broker will “block” the trade and ask you to accept a new price. You will be “re-quoted” with a new price.

The requote message will appear on your trading platform letting you know that price has moved and asks you whether or not you are willing to accept that price. It’s almost always a price that is worse than the one you ordered.

Slippage is another problem. When prices are moving fast, the broker is unable to consistently maintain a fixed spread and the price that you finally end up after entering a trade will be totally different than the intended entry price.

Slippage is similar to when you swipe right on Tinder and agree to meet up with that hot gal or guy for coffee and realize the actual person in front of you looks nothing like the photo.

What are Variable Spreads in Forex?

As the name suggests, variable spreads are always changing. With variable spreads, the difference between the bid and ask prices of currency pairs is constantly changing.

Variable spreads are offered by non-dealing desk brokers. Non-dealing desk brokers get their pricing of currency pairs from multiple liquidity providers and pass on these prices to the trader without the intervention of a dealing desk.

This means they have no control over the spreads. And spreads will widen or tighten based on the supply and demand of currencies and the overall market volatility.

Typically, spreads widen during economic data releases as well as other periods when the liquidity in the market decreases (like during holidays and when the zombie apocalypse begins).

For example, you may want to buy EURUSD with a spread of 2 pips, but just when you’re about to click buy, the U.S. unemployment report is released and the spread rapidly widens to 20 pips!

Oh, and spreads may also widen when Trump randomly tweets about the U.S. dollar when he was still the President.

What are the Advantages of Trading With Variable Spreads?

Variable spreads eliminate experiencing requotes. This is because the variation in the spread factors in changes in price due to market conditions.

(But just because you won’t get requoted doesn’t mean you won’t experience slippage.)

Trading forex with variable spreads also provides more transparent pricing, especially when you consider that having access to prices from multiple liquidity providers usually means better pricing due to competition.

What are the Disadvantages of Trading With Variable Spreads?

Variable spreads aren’t ideal for scalpers. The widened spreads can quickly eat into any profits that the scalper makes.

Variable spreads are just as bad for news traders. Spread may widen so much that what looks like a profitable can turn into an unprofitable within a blink of an eye.

Fixed vs Variable Spreads: Which is Better?

The question of which is a better option between fixed and variable spreads depends on the need of the trader.

There are traders who may find fixed spreads better than using variable spread brokers. The reverse may also be true for other traders.

Generally speaking, traders with smaller accounts and who trade less frequently will benefit from fixed spread pricing.

And traders with larger accounts who trade frequently during peak market hours (when spreads are the tightest) will benefit from variable spreads.

Traders who want fast trade execution and need to avoid requotes will want to trade with variable spreads.

Spread Costs and Calculations.

Now that you know what a spread is, and the two different types of spreads, you need to know one more thing…

How the spread relates to actual transaction costs.

It’s pretty easy to calculate and all you need are two things:

The value per pip The number of lots you’re trading.

Let’s look at an example…

In the quote above, you can buy EURUSD at 1.35640 and sell EURUSD at 1.35626.

This means if you were to buy EURUSD and then immediately close it, it would result in a loss of 1.4 pips.

To figure out the total cost, you would multiply the cost per pip by the number of lots you’re trading.

So if you’re trading mini lots (10,000 units), the value per pip is $1, so your transaction cost would be $1.40 to open this trade.

The pip cost is linear . This means that you will need to multiply the cost per pip by the number of lots you are trading .

If you increase your position size, your transaction cost, which is reflected in the spread, will rise as well.

For example, if the spread is 1.4 pips and you’re trading 5 mini lots, then your transaction cost is $7.00.

Forex spreads 2

What is the spread in forex and how do you calculate it?

The spread in forex is the primary cost of trading currency with us. Learn more about a forex spread, including what it is and how it’s calculated.

Anzél Killian | Financial writer , Johannesburg.

What is the spread in forex?

The spread in in forex is a small cost built into the buy (bid) and sell (ask) price of every currency pair trade. When you look at the price that’s quoted for a currency pair, you will see there is a difference between the buy and sell prices – this is the spread or the bid/ask spread.

Changes in the spread are measured by small price movements called pips – which is any change in the fourth decimal place of a currency pair (or second decimal place when trading pairs quoted in JPY). It is not only the spread that will determine the total cost of your trade, but also the lot size.

Remember, every forex trade involves buying one currency pair and selling another. The currency on the left is called the base currency, and the one on the right is called the quote currency. When trading FX, the bid price is the cost of buying the base currency, while the ask price is the cost of selling it.

With us, you’ll be trading forex using leverage. This enables you to get exposure to large amounts of currency without having to pay the full value of their trade upfront. You can go long or short, which means you can speculate on rising as well as falling currency prices. And, you only need a small deposit – called margin – to open your position.

The margin can be as low as 2% of the value of the trade, which means you can make your capital go further while still getting exposure to the full value of the trade. Note, margin will magnify both your profits and your losses.

How to calculate the spread in forex.

To calculate the spread in forex, you have to work out the difference between the buy and the sell price in pips. You do this by subtracting the bid price from the ask price. For example, if you’re trading GBP/USD at 1.3089/1.3091, the spread is calculated as 1.3091 – 1.3089, which is 0.0002 (2 pips).

Spreads can either be wide (high) or tight (low) – the more pips derived from the above calculation, the wider the spread. Traders often favour tighter spreads, because it means the trade is more affordable.

If the forex market is very volatile and not very liquid, spreads will likely be wide, and vice versa. For example, major currency pairs such as EUR/USD will have a tighter spread than an emerging market currency pair such as USD/ZAR. However, spreads can change, depending on the factors explained next.

Why does the spread change in forex?

The spread in forex changes when the difference between the buy and sell price of a currency pair changes. This is called a variable spread – the opposite of a fixed spread. When trading forex, you will always deal with a variable spread.

A forex pair’s spread may increase if there is an important news announcement or an event that causes higher market volatility. One of the downsides of a variable spread is that, if the spread widens dramatically, your positions could be closed or you’ll be put on margin call. Keep an eye on our economic calendar to stay abreast of upcoming financial events.

Forex trading platforms.

There are a range of forex trading platforms to choose from, including our award-winning platform, MT4 or an MT4 VPS. Each of these platforms will show you our forex spreads up front when you select a pair to trade.

Our online forex trading platform.

You can use our platform to trade over 80 currency pairs including majors like EUR/USD and GBP/USD, and minors like CAD/JPY and EUR/ZAR. Our minimum forex spreads start at 0.8 for EUR/USD and USD/JPY.

You’ll also get in-platform news and analysis from our expert team and Reuters, as well as technical indicators like moving averages and relative strength index (RSI) to help you conduct technical analysis.

MetaTrader 4.

MetaTrader 4 (MT4) is an automatable forex trading platform, and it has been popular with forex traders for over 15 years. When you create an MT4 account with us, you’ll get access to MT4 and our full range of MT4 forex markets, as well as a number of free indicators and add-ons to help you conduct analysis and customize the platform. Our minimum MT4 forex spreads start at 0.8 on EUR/USD.

Forex spread summed up.

A forex spread is the primary cost of a currency trade, built into the buy and sell price of an FX pair A spread is measured in pips, which is a movement at the fourth decimal place in a forex pair’s quote price (or second place if quoted in JPY) To calculate the forex spread, subtract the buy price from the sell price Forex spreads are always variable, and they can either be wide (high) or tight (low) Traders often favour tighter spreads, because it means the trade is more affordable If a market is very volatile and not very liquid, wide spreads may occur If a market has high liquidity but is not very volatile, tighter spreads may occur Factors like important news announcements or an event that causes higher market volatility can cause spreads to change.

Forex spreads 1

How Is Spread Calculated in the Forex Market?

Chris Gallant, CFA, is a senior manager of interest rate risk for ATB Financial with 10 years of experience in the financial markets.

Updated June 30, 2022.

Reviewed by.

Reviewed by Gordon Scott.

Gordon Scott has been an active investor and technical analyst of securities, futures, forex, and penny stocks for 20+ years. He is a member of the Investopedia Financial Review Board and the co-author of Investing to Win. Gordon is a Chartered Market Technician (CMT). He is also a member of CMT Association.

Investing in the forex markets involves trading one currency in exchange for another at a preset exchange rate. Therefore, currencies are quoted in terms of their price in another currency. The forex spread is the difference between the exchange rate that a forex broker sells a currency, and the rate at which the broker buys the currency.

The foreign exchange market, with its daily trade volume of $5 trillion, has many participants, including forex brokers, retail investors, hedge funds, central banks, and governments. All of this trading activity impacts the demand for currencies, their exchange rates, and the forex spread.

Key Takeaways.

The forex spread is the difference between a forex broker's sell rate and buy rate when exchanging or trading currencies. Spreads can be narrower or wider, depending on the currency involved, the time of day a trade is initiated, and economic conditions. Brokers can add to or widen their bid-ask spread, meaning an investor would pay more when buying and receive less when selling.

Understanding Forex Trading.

Forex trading or FX trading is the act of buying and selling currencies at their exchange rates in hopes that the exchange rate will move in the investor's favor. Traders can buy euros, for example, in exchange for U.S. dollars at the prevailing exchange rate–called the spot rate–and later, sell the euros to unwind the trade. The difference between the buy rate and the sell rate is the trader's gain or loss on the transaction. Before exploring forex spreads on FX trades, it's important to first understand how currencies are quoted by FX brokers.

How Currencies Are Quoted.

Currencies are always quoted in pairs, such as the U.S. dollar versus the Canadian dollar (USD/CAD). The first currency is called the base currency, and the second currency is called the counter or quote currency (base/quote).

For example, if it took $1.2500 (Canadian dollars) to buy $1 (U.S. dollar), the expression USD/CAD would equal 1.2500/1 or 1.2500. The USD would be the base currency, and the CAD would be the quote or counter currency. In other words, the rate is expressed in Canadian terms, meaning it costs 1.25 Canadian dollars to buy one U.S. dollar.

However, some currencies are expressed in U.S. dollar terms, meaning the USD is the quote currency. For example, the British pound to U.S. dollar exchange rate of 1.2800 would be quoted as $1.2800 (dollars) for every British pound. The pound is the base currency and would be abbreviated as GBP/USD.

The euro is also quoted as the base currency so that one euro at an exchange rate of 1.1450 would mean it costs $1.1450 (in dollars) to buy one euro. In other words, the EUR/USD would be quoted by a broker as $1.1450 to initiate a trade.

How the Spread Is Calculated in the Forex Market.

Now that we know how currencies are quoted in the marketplace let's look at how we can calculate their spread. Forex quotes are always provided with bid and ask prices, similar to what you see in the equity markets.  

The bid represents the price at which the forex market maker or broker is willing to buy the base currency (USD, for example) in exchange for the counter currency (CAD). Conversely, the ask price is the price at which the forex broker is willing to sell the base currency in exchange for the counter currency.

The bid-ask spread is the difference between the price a broker buys and sells a currency. So, if a customer initiates a sell trade with the broker, the bid price would be quoted. If the customer wants to initiate a buy trade, the ask price would be quoted.

For example, let's say a U.S. investor wants to go long or buy euros, and the bid-ask price on the broker's trading website is $1.1200/1.1250. To initiate a buy trade, the investor would get charged the ask price of $1.1250. If the investor immediately sold back the euros to the broker–which would unwind the position–the investor would get the bid price of $1.1200 per euro (assuming the exchange rate hadn't fluctuated). In other words, the speculative trade cost the investor $.0050 solely due to the exchange rate's bid-ask spread with the broker.

How Forex Spreads Are Quoted.

Below is an example of how a broker's quote for EUR/USD might look with the bid-ask spread built into it.

EUR/USD Bid Ask $1.1200 $1.1250 Sell Buy EUR/USD Bid-Ask Prices Example.

Spreads can be narrower or wider, depending on the currency involved. The 50 pip spread between the bid and ask price for EUR/USD (in our example) is fairly wide and atypical. The spread might normally be one to five pips between the two prices. However, the spread can vary and change at a moment's notice given market conditions.

Investors need to monitor a broker's spread since any speculative trade needs to cover or earn enough to cover the spread and any fees. Also, each broker can add to their spread, which increases their profit per trade. A wider bid-ask spread means that a customer would pay more when buying and receive less when selling. In other words, each forex broker can charge a slightly different spread, which can add to the costs of forex transactions.

How Exogenous Events Drive Forex Spreads.

Besides the broker, other factors can widen or narrow a forex spread.

Time of Day.

The time of the day that a trade is initiated is critical. European trading, for example, opens in the wee hours of the morning for U.S. traders while Asia opens late at night for U.S. and European investors. If a euro trade is booked during the Asia trading session, the forex spread will likely be much wider (and more costly) than if the trade had been booked during the European session.

In other words, if it's not the normal trading session for the currency, there won't be many traders involved in that currency, causing a lack of liquidity. If the market isn't liquid, it means that the currency isn't easily bought and sold since there aren't enough market participants. As a result, forex brokers widen their spreads to account for the risk of a loss if they can't get out of their position.

Events and Volatility.

Economic and geopolitical events can drive forex spreads wider as well. If the unemployment rate for the U.S. comes out much higher than anticipated, for example, the dollar against most currencies would likely weaken or lose value. The forex market can move abruptly and be quite volatile during periods when events are occurring. As a result, forex spreads can be extremely wide during events since exchange rates can fluctuate so wildly (called extreme volatility). Periods of event-driven volatility can be challenging for a forex broker to pin down the actual exchange rate, which leads them to charge a wider spread to account for the added risk of loss.

Forex spreads

Spread in forex trading.

In forex trading, the spread is the difference between the bid (sell) price and the ask (buy) price of a currency pair. There are always two prices given in a currency pair, the bid and the ask price. The bid price is the price at which you can sell the base currency, whereas the ask price is the price you would use to buy the base currency.

The base currency is shown on the left of the currency pair, and the variable, quote or counter currency, on the right. The pairing tells you how much of the variable currency equals one unit of the base currency. The buy price quoted will always be higher than the sell price quoted, with the underlying market price being somewhere in-between.

See inside our platform.

Get tight spreads, no hidden fees and access to 10,000+ instruments.

Includes free demo account.

Quick link to content:

What is spread in forex?

Most forex currency pairs are traded without commission, but the spread is one cost that applies to any trade that you place. Rather than charging a commission, all leveraged trading providers will incorporate a spread into the cost of placing a trade, as they factor in a higher ask price relative to the bid price. The size of the spread can be influenced by different factors, such as which currency pair you are trading and how volatile it is, the size of your trade and which provider you are using.

Some of the major major forex pairs include:

EUR/USD: Euro and US dollar USD/JPY: US dollar and Japanese yen GBP/USD: British pound and US dollar USD/CHF: US dollar and Swiss franc.

Forex trading pip spread.

The spread is measured in pips, which is a small unit of movement in the price of a currency pair, and the last decimal point on the price quote (equal to 0.0001). This is true for the majority of currency pairs, aside from the Japanese yen where the pip is the second decimal point (0.01).

When there is a wider spread, it means there is a greater difference between the two prices, so there is usually low liquidity and high volatility. A lower spread on the other hand indicates low volatility and high liquidity. Thus, there will be a smaller spread cost incurred when trading a currency pair with a tighter spread.

When trading forex, the spread can either be variable or fixed. The spread for forex pairs is variable, so when the bid and ask prices of the currency pair change, the spread changes too. Some of the benefits and drawbacks of these two types of spreads are outlined below:

Fixed Spread Variable Spread Could face requotes No risk of requotes Predictable transaction costs Can get a tighter spread than fixed Smaller capital requirements Can reveal market liquidity More appropriate for novice traders More appropriate for experienced traders A volatile market won't effect the spread Spread can widen rapidly if there is high volatility Likely to be exposed to slippage Can be exposed to slippage.

Trade on over 330 forex pairs with us.

How to calculate spread in forex.

The spread is calculated using the last large numbers of the buy and sell price, within a price quote. The last large number in the image below is a 3 and a 4. When trading forex, or any other asset via a CFD trading or spread betting account, you pay the entire spread upfront. This compares to the commission paid when trading share CFDs, which is paid both when entering or exiting a trade. The tighter the spread, the better value you get as a trader.

The bid price is 1.26739 and the ask price is 1.26749 for the GBP/USD currency pair.

If you subtract 1.26739 from 1.26749, that equals 0.0001.

As the spread is based on the last large number in the price quote, it equates to a spread of 1.0.

Practise trading the forex market risk-free with a demo account, using virtual funds. Start trading now with a live account to get access to exclusive features, such as our chart forum, live market data and Reuters/Morningstar reports, as well as stock trading.

What determines the spread in forex?

Factors that can influence the forex spread include market volatility, which can cause fluctuation. Major economic indicators, for example, can cause a currency pair to strengthen or weaken – thus affecting the spread. If the market is volatile, currency pairs can incur gapping, or the currency pair becomes less liquid, so the spread will widen.

Keeping an eye on our FX economic calendar can help prepare you for the possibility of wider spreads. By staying informed as to what events might cause currency pairs to become less liquid, you can make an educated prediction as to whether their volatility might increase, and thus whether you might see a greater spread. However, breaking news or unexpected economic data can be difficult to prepare for.

During the major forex market sessions, such as in London, New York and Sydney, there are likely to be lower spreads. In particular, when there is an overlap, such as when the London session is ending and the New York session is beginning, the spread can be narrower still. The spread is also influenced by the general supply and demand of currencies; if there is a high demand for the euro, the value will increase.

Forex spread trading strategies.

Due to the above points, forex traders can employ an event-driven strategy based on macroeconomic indicators, in order to trade the tightest forex spreads and profit from opportune moments. For example, by monitoring the latest trading news and economic announcements, traders can expect changes in the forex market and find suitable entry and exit points when opening a position. This is called event-driven trading.

To start trading on some of the best currency pairs in the forex market, we have provided a list of suggestions here.

​Forex spread indicator.

A forex spread strategy can also be strengthened by the use of a trading indicator ​​. The forex spread indicator is typically displayed as a curve on a graph to show the direction of the spread as it relates to bid and ask price. This helps visualise the spread in the forex pair over time, with the most liquid pairs having tighter spreads and the more exotic pairs having wider spreads.

There will also be a lower spread for currency pairs traded in high volumes, such as the major pairs containing the USD. These pairs have higher liquidity but can still be at risk of widening spreads if there is economic volatility.

Forex spread changes.

If the forex spread widens dramatically, you run the risk of receiving a margin call, and worst case, being liquidated. A margin call notification occurs when your account value drops below 100% of your margin level, signalling you’re at risk of no longer covering the trading requirement. If you reach 50% below the margin level, all your positions may be liquidated.

It is therefore important to gauge how much forex leverage you’re trading with and the size of your position. Forex pairs are usually traded in larger amounts than shares, so it’s important to remain aware of your account balance.

Explore our forex spreads.

Seamlessly open and close trades, track your progress and set up alerts.

Low spread forex broker.

We offer competitive spreads on a range of currency pairs, including major pairs such as EUR/USD and GBP/USD, starting at just 0.7 pips, or a forex margin rate of 3.3%. Discover forex trading with our award-winning trading platform, Next Generation. We also offer forex trading on our hosted MetaTrader 4 platform. Get started now by opening an account.


A forex spread is the difference between the bid price and the ask price of a currency pair, and is usually measured in pips. Knowing what factors cause the spread to widen is crucial when trading forex. Major currency pairs are traded in high volumes so have a smaller spread, whereas exotic pairs will have a wider spread. See our guide on money and risk management when trading in the forex market.

See why serious traders choose CMC.

Get tight spreads, no hidden fees, access to 10,000+ instruments and more.

FCA regulated.

Segregated funds.

Includes free demo account.

+44 (0)20 7170 8200.

Lines open 24hrs, Monday-Friday.

CMC Markets UK 133 Houndsditch London EC3A 7BX.

Download our app.

Get greater control and flexibility for peak performance trading when you're on the go.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider . You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

CMC Markets is, depending on the context, a reference to CMC Markets Germany GmbH, CMC Markets UK plc or CMC Spreadbet plc. CMC Markets Germany GmbH is a company licensed and regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) under registration number 154814. CMC Markets UK Plc and CMC Spreadbet plc are registered in the Register of Companies of the Financial Conduct Authority under registration numbers 173730 and 170627.

Telephone calls and online chat conversations may be recorded and monitored. Apple, iPad, and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc. This website uses cookies to obtain information about your general internet usage. Removal of cookies may affect the operation of certain parts of this website. Learn about cookies and how to remove them. Portions of this page are reproduced from work created and shared by Google and used according to terms described in the Creative Commons 3.0 Attribution License.