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 2022
Based on our research, here are the best low spread brokers or zero spread brokers.
- Pepperstone – Lowest Spread Forex Broker Overall
- AvaTrade – Fixed Low Spreads Forex Broker
- FP Markets – Ultra-competitive Low Spreads Broker
- IC Markets – Raw Spreads Account Forex Broker from 0.0 Pips
- Forex.com – 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
Runner up
PFI Rating 4.9
Best Overall
PFI Rating 4.9
Third Place
PFI Rating 4.8
Table of contents
- 1 Low Spread Forex Brokers 2022
- 2 Pepperstone – Lowest Spread Accounts and Best Overall
- 3 FP Markets
- 4 AvaTrade
- 5 IC Markets
- 6 Forex.com
- 7 FXTM
- 8 What are Low Spread or Zero Spread Brokers?
- 9 Compare Forex Costs per 100,000 Traded
- 10 How to pick a Low-Spread Forex Broker?
- 11 What is Spread in Forex?
- 12 What is considered a good spread?
- 13 How To Compare Low Spread Accounts?
- 14 How does a good spread make a difference?
- 15 Scalping and Spreads
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
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 |
PFI Rating: 4.9/5
AvaTrade
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
Forex.com
Forex.com is one of the top-rated brokers in the US. This is another safe and reliable choice. Forex.com 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 Forex.com 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
FXTM
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 |
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 | Forex.com | Variable | from 1.0 | 2006 |
| 6 | FXTM | Variable | from 0.4 | 2011 |
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?
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.
