Wide forex spreads can have a significant negative impact on the profitability of trading, and choosing a broker with tight spreads will save you a lot of money over the course of your trading journey.
If you’re looking for the lowest spread forex broker, you’re in luck – we’ve selected 6 of the leading low spread forex brokers that will allow you to cut down on the cost of transaction and make the most out of your trading.
The best low spread forex brokers:
CMC Markets
Interactive Brokers
IC Markets
IG
FP Markets
FxPro
Spread in forex trading explained
In trading, the spread is the difference between the rate the asset is being sold and the rate at which it is being bought. The same applies to forex trading – when using forex brokers, you will notice that there is often a difference between the buy and sell rates for any given trading pair.
Typically, the buy and sell prices are referred to bid and ask prices. The bid price is the price at which the broker or market maker is offering to buy the base currency. Conversely, the ask price is the price at which the broker or market maker is offering to sell the base currency. The difference between the bid and ask price is referred to as the bid-ask spread.
In an USD/EUR trading pair, the bid price would be the price at which the broker is willing to buy USD in exchange for EUR. Meanwhile, the ask price would be the price at which the broker is willing to sell USD in exchange for EUR.
A wider spread typically signals low liquidity and high volatility, while a narrower spread suggests higher liquidity and lower volatility.
There are multiple factors that can influence how wide the spread on a trading pair is.
Economic and geopolitical events that increase volatility tend to result in wider spreads, and the spread can also change based on the time of day (there’s less liquidity during certain hours of the day).
However, brokers themselves can also widen their bid-ask spread as a way to make money. Even if a trader advertises no-commission trading, their spreads might be wide enough that you would be better off trading with a broker that charges a commission but has tighter spreads.
In order to make a profit on a forex trade, you need to cover both the spread and any applicable fees. When trading forex, you want to choose a broker with low spreads in order to save on transaction costs.
Best low spread forex brokers
Now that we have a basic understanding of how the spread works in the forex market and why a narrower spread is a better deal for traders, let’s take a look at each broker that made our shortlist of the best low spread forex brokers.
1. CMC Markets
CMC Markets has earned its reputation as a leader in forex trading. The CMC Markets platform provides traders comprehensive research and market analysis tools, making it a good option for traders who rely on data-driven decisions.
This broker provides low spreads for some of the most popular forex trading pairs – 0.5 pips on EUR/USD, 0.9 pips on GBP/USD and 0.7 pips on USD/JPY. Traders who want to trade with zero spread on CMC Markets can create an “FX Active” account, which has 0.0 pip spreads with a fixed commission of $2.50 per $100,000 in notional value traded. FX Active can be accessed on MetaTrader 4 or on the CMC Markets proprietary web trading platform.
On top of its low spread offering, CMC markets also provides a fully-featured trading interface, which allows traders to benefit from charting tools and advanced order types (including orders such as partial closure and trailing stop loss).
In addition, the CMC Markets mobile application is one of the best in the business, providing forex traders the ability to trade efficiently even when on the go.
Visit CMC Markets
2. Interactive Brokers
Interactive Brokers is a renowned trading platform that’s usually favored by experienced traders who require advanced functionality.
Interactive Brokers distinguishes itself with its FXTrader feature, which a specialized platform designed for forex traders. FXTrader features a modern user interface, real-time quotes, a large number indicators and other advanced tools.
On FXTrader, traders get access to interbank-quality spreads, which can be as low as 0.1 pips. The platform supports more than 20 order types, allowing traders to implement sophisticated trading strategies.
Interactive Brokers is a trading platform that’s best suited for those who already have experience in the markets and are looking for powerful features. However, it’s difficult to recommend for beginners, who might find the platform too overwhelming.
Visit Interactive Brokers
3. IC Markets
IC Markets is a forex and CFD broker that offers well over 2,000 instruments for trading. This broker supports MetaTrader 4, MetaTrader 5 and cTrader platforms, has a relatively low $200 minimum deposit requirement, and has competitive spreads.
IC Markets offers competitive spreads on its Standard account, often outperforming the industry average across various asset classes, including forex, indices, commodities, and cryptocurrencies. This makes it an attractive option for traders who are looking for cost-efficient trading.
In addition to its favorable spreads, IC Markets gives day traders a way to stay on top of the latest trading opportunities with the Trading Central and Autochartist tools.
Notably, IC Markets gives users the option to open a Raw Spread account, which offers very low spreads and a fixed commission of $3.50 per lot (per side). The account is designed to suit the needs of day traders, scalpers and other types of traders who require maximum efficiency.
Visit IC Markets
4. IG
IG is a well-established online trading platform that’s suitable for both beginners and advanced traders. Beginners will appreciate the platform’s educational resources, unlimited forex demo trading mode and streamlined web trading platform. Meanwhile, advanced traders will be able to take advantage of competitive spreads, robust selection of indicators, a good range of available order types, support for MetaTrader 4 and much more.
In addition to its proprietary web-based trading platform, IG offers ProRealTime, a top-tier platform for dedicated traders. IG enhances its MT4 with 18 add-ons and Autochartist, offering an impressive range of features for demanding traders.
IG offers spreads as low as 0.6 points on key FX pairs, which makes it a solid choice if forex spreads are one of your main concerns when choosing a broker.
Visit IG
5. FP Markets
FP Markets is an online trading platform that offers tight spreads starting from 0.0 pips and up to 500:1 leverage on its Pro Account. With its MetaTrader 5 integration, FP Markets provides various trading functions, including alerts via email and push notifications on mobile devices, making it easier for traders to stay updated on market changes.
The FP Markets platform also features forex signals and supports copy trading, which is ideal for beginners or those seeking a more hands-off trading experience.
If you’re looking for the lowest spreads on FP Markets, the platform provides “Raw” accounts which can be used via MetaTrader 4 and MetaTrader 5. These accounts have a maximum leverage of 30:1, 0.0 pip spreads and a fixed commission of $3 per lot (per side).
Visit FP Markets
6. FxPro
FxPro is a popular broker that supports the MetaTrader 4, MetaTrader 5, cTrader and FxPro Edge trading platforms. Traders on FxPro can access more than 2,000 trading instruments, and the broker is suitable for both beginners and advanced traders.
Traders who want to access the lowest spreads the FxPro platform has to offer can opt for their MT4 Raw Spread account, which has spreads without markup on forex and metals. Trades on this account are charged with a fixed commission of $3.50 per lot (per side).
FxPro is ideal for forex and CFD traders seeking a broad range of market options. With a wide selection of forex pairs, as well as the ability to trade equity indices, individual company shares, cryptocurrencies, metals, and energy, FxPro is a good choice if you value the ability to access a broad range of markets.
Visit FxPro
The bottom line
Hopefully, our selection of the best low spread forex brokers has helped you find a broker that will save you money over the long term. Choosing brokers with tight spreads can go a long way towards improving the profitability of your trades, especially if you trade frequently on lower time frames.
If you’re looking for additional forex brokers that are worth checking out, make sure to take a look at our list of the best forex brokers with no minimum deposit.