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 brokers to make things easier for you. We collected trustworthy brokers who are regulated and have a strong reputation.
Table of contents
- 1 What are Lowest Spread or Zero Spread Brokers?
- 2 Top 10 Lowest Spread Forex Brokers
- 3 Compare Forex Costs per 100,000 Traded
- 4 1. Pepperstone – Lowest Spread Accounts and Best Overall
- 5 2. AvaTrade
- 6 3. FP Markets
- 7 4. IC Markets
- 8 5. Forex.com
- 9 6. FXTM
- 10 What is Spread in Forex?
- 11 What is considered good spread?
- 12 How To Compare Low Spread Accounts?
- 13 How does a good spread make a difference?
- 14 Scalping and Spreads
What are Lowest Spread or Zero Spread Brokers?
The Lowest Spread brokers offer the lowest Forex Spreads or zero spreads. Trading costs declined over the 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 fees, commissions, non-trading fees, deposit or withdrawal fees, and inactivity charges.
Top 10 Lowest Spread Forex Brokers
Based on our research, here are the best lowest spread brokers or zero spread brokers.
- Pepperstone – Overall Lowest Spread Forex Broker
- AvaTrade – Fixed Tight Spreads Forex Broker
- FP Markets – Ultra-competitive 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 Forex Broker
- IG – No Commission Broker
- FxPro – 0 Spread Forex Broker
- Fusion Markets – Low Commission Forex Broker
Compare Forex Costs per 100,000 Traded
| # | Forex Broker | Spread | Pips on Majors * | 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 |
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89 % 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
1. 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 Quick Facts
Pepperstone is a safe and reliable forex trading platform, trusted by many traders across the globe. Peperstone offers fast execution speeds and 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 competitive spreads, their Razor account is a good choice.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89 % 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
2. AvaTrade
AvaTrade is an excellent broker for active traders. They offer competitive fixed spreads of 0.9 pips with no commissions. The minimum deposit is $100 to open a an account with AvaTrade. They offer access to their proprietary platforms as well as both MT4 and MT5. On the downside, they charge above average inactivity fees.
| 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 |
3. FP Markets
First Prudential (FP) Markets is another excellent choice. They are a well-regulated and trustworthy 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 as well as an impressive selection of educational content.
On the downside, FP Markets isn’t available to US citizens.
| Pros | Cons |
|---|---|
| Spreads starting at 0 pips | Not available in the US |
| Wide selection of platforms | |
| Educational resources | |
| Fast order execution |
4. 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 make it a top choice for scalpers and algorithmic traders. IC Markets has no deposit or withdraw commission fees. Plus, customers get access to 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.
| Pros | Cons |
|---|---|
| Average spreads of 0.1 pips | High Minimum account deposit |
| Fast order execution speed | |
| No withdrawal or deposit fees | |
| Powerful platform |
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 platform 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.
| 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 |
6. FXTM
ForexTime (FXTM) is another reliable choice for both experienced and beginner traders. With a great selection of account types, FXTM offers traders spreads starting at 0.1 pips.
FXTM gives clients access to over 200 markets which includes 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.
| 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 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 that there are volatile market conditions or liquidity in the market. Spreads usually widen during less frequent trading hours, volatility, 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 that you trade. This is done instead of paying a commission fee per trade. While some brokers advertise lower spreads, they end up being more expensive, because they charge higher commissions. Because spreads change during time periods, it is best to calculate Average Spread data over a longer period of time (monthly spread data) and commissions (spread + commission). That is how you avoid higher average spreads.
How does Spread work in Forex?
The bid price is the price at which you are willing to sell a currency and the price at which a broker is willing to pay for it. 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 in how the spread is calculated. This price difference is calculated in pips. Pip stands for “percentage in points”. In Forex, 1 pip is usually equal to 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 price difference between the bank that wants to buy the currency at a set price and the selling bank offer. Second is the spread of the 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 work out 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 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 a longer period of time.
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. In order to calculate which broker has lower spreads, it is important to calculate all trading costs. While some brokers offer zero spreads, they still charge per-trade commissions, which could end up costing you more.
What is a zero spread account?
Zero Spread Trading Account is a forex trading account that has 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 take into account 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 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. It means that the cost of trading is less. Incorporating spreads into your 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 large loss could erase the many small gains made.
