| Updated: June 13, 2024There is much that traders must be familiar with before they decide to partake in forex trading, and the spread might be among the most crucial aspects of the forex market in general. It dictates the costs a user will incur while trading, after all, which is why experienced traders typically seek out brokers that offer narrow spreads. If you are a newcomer to the world of forex trading and are yet to find a low-spread broker, consider checking out our selection of brokers offering the tightest spreads.
IC Markets70.64% of retail investor accounts lose money
FP Markets73.85% of retail investor accounts lose money
Fusion Markets74-89% of retail CFD accounts lose money
Pepperstone75.5% of retail investor accounts lose money
AvaTrade76% of retail investor accounts lose money
eToro51% of retail investor accounts lose money
IG70% of retail client accounts lose money
Global Prime74-89% of retail CFD accounts lose money
Tickmill70% of retail investor accounts lose money
Vantage FXForex Brokers Ranked by Spread Commission
| Forex Broker | EURUSD | USDJPY | EURGBP | GBPUSD |
|---|---|---|---|---|
| 1. Tickmill | 0.1 | 0.1 | 0.4 | 0.3 |
| 2. FP Markets | 0.10 | 0.30 | 0.30 | 0.30 |
| 3. Fusion Markets | 0.11 | 0.13 | 0.15 | 0.11 |
| 4. Global Prime | 0.13 | 0.28 | 0.28 | 0.22 |
| 5. IG | 0.6 | 0.9 | 0.9 | 0.9 |
| 6. IC Markets | 0.8 | 0.8 | 0.8 | 0.8 |
| 7. AvaTrade | 0.9 | 1.3 | 1.2 | 1.3 |
| 8. Pepperstone | 1.0 | 1.0 | 1.2 | 1.0 |
| 9. Vantage FX | 1.0 | 1.0 | 1.2 | 1.0 |
| 10. eToro | 1.0 | 1.0 | 1.5 | 2.0 |
Top 10 Brokers Offering Competitive Spreads
- 1. IC Markets
IC Markets is a forex broker that has welcomed traders from the UK, France, Spain, and other countries since 2007. As such, IC Markets is a regulated broker that has earned the seal of approval of the FSA (Seychelles) and CySEC.
Traders can pick between MetaTrader4, MetaTrader5, or cTrader, all of which are suitable for trading on both computers and portable devices. The broker boasts spreads that start at 0.0 pips for Raw accounts, while for standard accounts, the lowest spread available is 0.8 pips.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70.64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 2. IG
Headquartered in the UK, IG gives its traders the opportunity to participate in the forex market, as well as trade shares, indices, and shares, among other financial instruments. Dozens of currency pairs are available, and their spreads are considered to be quite low, with an example being the EUR/USD pair that has an average spread of 0.6 pips.
If you are new to trading, IG has excellent guides, and users can also attend online courses and webinars. Moreover, if you ever run into any issues while using your account, you can contact IG’s customer support via live chat, email, or phone.
CFDs are complex instruments. 70% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. - 3. Tickmill
Tickmill made its online debut in 2005, and it has been the broker of choice for many traders ever since. The broker offers two main account types, the first one being dubbed “Classic,” with the minimum spreads being listed as 1.6 pips. The “Raw” account, on the other hand, boasts spreads starting at 0.0 pips. Tickmill supports both MT4 and MT5, and once a user decides to fund their account balance, they can choose between bank transfers, Visa, Mastercard, and digital wallets.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with Tickmill Europe Ltd. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 4. FP Markets
Whether you are a retail trader or a professional, FP Markets is a broker that will cater to your preferences. Its spreads are known to be competitive, and the Standard account type offers spreads that can be as low as 1 pip, while the spreads associated with Raw accounts begin at 0.0 pips.
FP Markets is regulated by both ASIC and CySEC, two regulators with an excellent reputation, and the broker’s customer support operates around the clock, seven days a week. This makes FP Markets a reputable broker that has made it easy for clients to reach out to a member of the customer service team whenever necessary.
10 per quarter for non-AU traders; 20 per quarter and notional volume of AU$1,000,000 per 4 quarters in the last 1 year 73.85% of retail CFD accounts lose money - 5. Vantage FX
Vantage supports the platforms MT4, MT5, TradingView, and cTrader, giving clients ample choice in terms of software. Regardless of which one a user goes with, they will be able to trade on both computers and smartphone devices. Vantage offers a demo account for traders who are just starting out, and there is a wealth of educational content available.
If you decide to make Vantage your broker of choice, the spreads you will be able to trade with will start from 1.1 pips if you become a standard user. Going with a Raw account, on the other hand, will let you trade with spreads as low as 0.0 pips.
With a great score of 4.6 on Trustpilot, Fusion Markets is quite popular among traders, with many praising the broker’s market selection, customer support, and competitive spreads. If you also make the decision to give Fusion Markets a try, you will be able to trade with spreads of 0.9 pips or over and pay no commissions by going with the Classic account type. Going with a Zero account, on the other hand, will allow you to trade with spreads starting at 0.0 pips.
Gleneagle Asset Management Limited (ABN 29 103 162 278) trading as Fusion Markets, is the issuer of the Fusion Markets Products described in this communication. Trading in Fusion Markets Products involves the potential for profit as well as the risk of loss which may vastly exceed the amount of your initial deposit and is not suitable for all investors. You should read all of these Financial Product Service Terms, the Product Disclosure Statement (PDS) and the Financial Services Guide (available on our website) carefully, consider your own financial situation, needs and objectives for investing in these Fusion Markets Products and obtain independent financial advice.- 7. Global Prime
The financial regulators of Australia and Vanuatu have deemed Global Prime to be a broker that meets all of their regulatory standards, as evidenced by Global Prime’s licenses. Clients also seem pleased with Global Prime’s services, given the fact that Global Prime boasts a score of 4.5 on Google Reviews, while its Trustpilot score stands at 4.3 currently.
The minimum spread of Global Prime’s Standard account is listed as 0.9 pips. If one wants to enjoy lower spreads of 0.0 pips or above, however, then they will need to go with the Raw account option.
Global Prime is a trading name of FMGP Trading Group Pty Ltd (ABN 74 146 086 017) and is regulated by ASIC and licensed to carry on a financial services business in Australia under Australian Financial Services License No. 385620. Gleneagle Securities Pty Limited trading as Global Prime FX, is a registered Vanuatu company (Company Number 40256) and is regulated by the VFSC. The website is owned and operated by FMGP Trading Group Pty Ltd, ABN 74 146 086 017. - 8. Pepperstone
Pepperstone’s services are offered in more than 160 countries, making it one of the most widely-available brokers in our list. With licenses from ASIC, CySEC, the FCA (UK), and other trusted supervisory authorities, traders can rest assured that Pepperstone is a broker that delivers in terms of security and the overall quality of its services. Pepperstone advertises spreads of 1.00 pip for Standard users, while the spreads that Raw traders can take advantage of start at 0.0 pips.
The broker has much to offer to inexperienced traders when it comes to education. A wealth of guides awaits on Pepperstone’s website, and users may also attend webinars.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.5% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 9. AvaTrade
Established in 2006, AvaTrade offers traders the option to trade currency pairs, stocks, and bonds, among other financial instruments. The spreads of currency pairs are relatively low, with EUR/USD averaging at around 0.9 pips, while the spreads of other majors tend to not exceed 2.0 pips. The broker’s app is compatible with both Android and iOS, and its platforms include both MetaTrader 4 and its successor, MT5. AvaTrade’s customer support team operates 24/5, and the broker’s customer service, in general, has been praised by many users on review platforms like Trustpilot.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 10. eToro
eToro was launched in 2007, and it currently enables its users to trade over 50 currency pairs, including but not limited to EUR/USD, AUD/CHF, and GBP/JPY, among others. The spreads are reasonable, with EUR/USD averaging at around 1 pip. The broker offers its own proprietary platform, but neither MT4 nor MT5 are available. eToro is available in plenty of countries globally, which is why users can choose between English, French, Polish, and Vietnamese, among others, in terms of languages.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
What is Spread in Forex Trading?
Each forex pair involves a buy (bid) price as well as a sell (ask) price. As they do not always match, the difference between the two prices is called the spread and it is measured in pips (percentage in points), with the pip being the smallest price move of a pair.
The spread is influenced by many factors, and the forex brokers themselves can also dictate whether the spread of a given forex pair is wide or narrow by marking it up. This is among the main reasons aspiring traders should take their time while looking for a suitable broker and pick carefully.
What is Considered Low/High Spread?
As established, the spread is simply the difference between the buy price and the sell price. If this difference is substantial, then that means that what the trader is looking at is a high spread. Typically, the forex pairs with the widest spreads are designated into the so-called “exotics” category. An example is the EUR/TRY pair, which can reach spreads of over 100 pips.
In contrast, the forex pairs that tend to have low spreads are typically the major ones, with an example being EUR/USD, which often has spreads averaging at around 1 pip or under.
Wide spreads like those of the EUR/TRY pair tend to indicate a volatile market with minimum liquidity. If you see a pair with narrow spreads, however, then usually, its liquidity will be high while its volatility–low.
How to Calculate Spread Movements?
Calculating the spread is relatively simple, and all one needs to do is subtract the sell price from the buy price. To demonstrate, let us say that we are looking at the EUR/USD pair and that its sell price stands at 1.07977, while the buy price is 1.07983. Thus, we should do the following calculation:
1.07983 – 1.07977 = 0.00006
The resulting number is the spread, while the pips are represented by the fourth digit after the decimal. Therefore, the EUR/USD pair’s spread in the above example stands at 0.6 pips. Do note that while for the majority of pairs, the pipa is based on the fourth digit, for some pairs, it is the second digit that matters.
We should also stress that your broker will display the current spread, so beyond understanding how the calculation works, you will not need to utilize it each time you plan to execute a trade.
How Can Traders Enjoy Lower Spreads?
- There are several actions one can take in order to trade with lower spreads. The first one is to simply choose a broker whose standard spreads are relatively narrow compared to the competition.
- An alternative is to go with a zero-spread account. As one can guess, a zero spread account is one where the bid and ask prices are identical or almost the same, allowing the spreads to start at 0.0 pips and generally average at lower than 1.0 pip. Such accounts are not cost-free, however. Instead, traders will typically need to pay commissions if they go with such an account.
- There are also raw-spread accounts where the spreads are not marked up, and the commissions are usually lower than those of zero-spread accounts. These accounts often offer spreads that, similarly to zero-spread trading, tend to be under 1.0 pip.
- Last but not least, there are professional accounts. They are reserved for individuals who meet the criteria of substantial trading activity, an impressive portfolio, or experience in the financial sector involving leveraged trading. In addition to typically featuring low spreads, professional accounts also come with the perk of large leverage. In jurisdictions like the UK and Australia, for instance, if you are a retail trader, you cannot trade with leverage of over 30:1. In contrast, professional accounts typically offer leverage of up to 500:1. Professional accounts typically lack negative balance protection however, so that is something to keep in mind.
Is It Always Better to Trade with Zero Spread Accounts?
While a zero-spread account can serve to make your trades have either low or non-existent spreads, there are some downsides that you should consider before you settle on going with such an account.
First and foremost, you should remember that standard accounts typically come with either no commissions or ones that are relatively low. Zero-spread accounts, on the other hand, tend to involve notable commissions and other potential fees, not to mention that the minimum deposit requirement for a zero-spread account may also be higher.
Additionally, depending on your trading strategy, the aforementioned commissions may also lead to costs exceeding those you would have incurred if you were trading with standard spreads. Finally, we should mention that often, not all financial instruments offered by a broker will have low or no spreads if one has a zero-spread account.