Lowest Spread Forex Brokers

Picking a Low Spread Forex trading platform is essential, especially for Forex traders who are scalping. These cut your trading cost in the long run, especially if you are an active trader. To make things easier for you, we’ve put together this list of the best brokers with low spreads.

Top 10 Low Spread Brokers

  • Pepperstone – Overall Lowest Spread Forex Broker
  • AvaTrade – Low Fixed Spreads Forex Broker
  • FP Markets – Trusted Low Spread Forex Broker
  • IC Markets – Raw Spreads FX Broker from 0.0 Pips
  • Forex.com – Best Execution Low Spread Broker
  • FXTM – High Leverage Tight Spreads
  • eToro – No Commissions on Stocks Broker
  • IG – No Commission Broker
  • FxPro – 0 Spread Broker
  • Fusion Markets – Low Commission Forex Broker
#BrokerSpreadPips on Majors *Established
1PepperstoneVariablefrom 0.72010
2AvaTradeVariablefrom 0.92006
3FP MarketsVariablefrom 1.42005
4IC MarketsVariablefrom 1.02007
5Forex.comVariablefrom 1.02006
6FXTMVariablefrom 0.42011
*Subject to Change and Depends on Account type

Pepperstone

Pepperstone is the overall best choice for both veteran and beginner traders. It offers various account types to suit every style and an impressive average spread of 0.16 pips.

This broker is well-known for its selection of third-party platforms, including MT4 and cTrader. Traders also gain access to a range of different tools.

A downside is that Pepperstone is not listed on the stock exchange. This limits the number of financial assets available. 

Pepperstone Logo
ProsCons
Average spreads of 0.16 pipsNot listed on the stock exchange
Low non-trading fees
Access to third-party platforms
Great customer service

AvaTrade

AvaTrade is an excellent brokerage choice 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.

AvaTrade Logo
ProsCons
Highly competitive fixed spreads of 0.9 pipsInactivity fees
Wide range of currency pairs 
Easy account opening process
Free deposits and withdrawals
Great research tools

FP Markets

First Prudential (FP) Markets is another excellent choice. They are a well-regulated and trustworthy broker. They offer tight 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.

FP Markets Logo
ProsCons
Spreads starting at 0 pipsNot available in the US
Wide selection of platforms
Educational resources
Fast order execution

IC Markets

With an average spread of 0.1 pips, IC Markets has one of the lowest spreads on this list. IC Markets great spreads and fast order execution make it a top choice for scalpers.

IC Markets has no deposit or withdraw commission fees. Plus, customers have access to powerful platforms including cTrader. 

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

IC Markets Logo
ProsCons
Average spreads of 0.1 pipsMinimum account deposit
Fast order execution speed
No withdrawal or deposit fees
Powerful platform

Forex.com

Forex.com is one of the top-rated brokers in the US. This is another safe and reliable choice offering competitive spreads to clients.

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.

forex.com logo
ProsCons
Top-rated brokerInactivity fees
Low feesLong account verification waiting period
Diverse research tools
Great range of currency pairs
Access to premium educational resources

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.

FXTM Logo
ProsCons
Spreads from 0.1 pipsHigh CFD fees
Responsive customer serviceInactivity 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 spread means that there is a small difference between the bid and the ask price of a currency pair. An increase in spreads usually means that there is high volatility or liquidity in the market. Spreads usually widen during less frequent trading hours, big shock, or before news events.

The spread is how no-commission brokers make a profit. The cost is built into the ask and bid prices of each currency pair that you trade. This is done instead of paying a commission fee per trade. 

>> Want to Trade Forex? Check out our guides on:

How does it work?

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. 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.

To calculate the spread, 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.

What is considered good spread?

Spreads are considered good when they are low. Low spreads usually have an average of below 1 pip. An example of a good spread would be 0.5 pips for a currency pair.

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 particularly important for scalping. Scalping is a strategy that involves profiting off of small price changes. Traders make a high number of trades. This means that traders need fast order execution and a strict exit strategy as one large loss could erase the many small gains made.