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Lowest Spread Forex Brokers

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When a slew of broker options are available, making the right choice can become a gargantuan task. It takes careful comparative analysis to choose the lowest spread forex broker that aligns with your interests and needs. Regulation, costs associated with trading, security, ease of trading and customer service, as well as commissions and spread, can all be key criteria.

The Lowest Spread Forex Brokers:

Commissions
$10 value per pip
Account Minimum
$0
Get started securely through IG Group’s website
Commissions
$10 value per pip
Account Minimum
$0
1 Minute Review

IG is a comprehensive forex broker that offers full access to the currency market and support for over 80 currency pairs. The broker only offers forex trading to its U.S.-based customers, the brokerage does it spectacularly well. Novice traders will love IG’s intuitive mobile and desktop platforms, while advanced traders will revel in the platform’s selection of indicators and charting tools. Though IG could work on its customer service and fees, the broker is an asset to new forex traders and those who prefer a more streamlined interface.  

Best For
  • New forex traders who are still learning the ropes
  • Traders who prefer a simple, clean interface
  • Forex traders who trade primarily on a tablet
Pros
  • Easy-to-navigate platform is easy for beginners to master
  • Mobile and tablet platforms offer full functionality of the desktop version
  • Margin rates are easy to understand and affordable
  • Access to over 80 currency pairs
Cons
  • U.S. traders can currently only trade forex
  • Customer service options are lacking
  • No 2-factor authentication on mobile
Account Minimum
100 of your selected base currency
Pairs Offered
80+
Get started securely through FOREX.com’s website
Account Minimum
100 of your selected base currency
Pairs Offered
80+
1 Minute Review

FOREX.com is a one-stop-shop for forex traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for brokers searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com’s extensive education and research center that provides free, informative forex trading courses at multiple skill levels. While FOREX.com is impressive, remember that it isn’t a standard broker. You can’t invest in the stock or bond market through your FOREX.com and you cannot open an account with tax advantages. The confusing pricing and margin structures may also be overwhelming for new forex traders.

Best For
  • MetaTrader 4 users
  • Beginner forex traders
  • Active forex traders
Pros
  • Impressive, easy-to-navigate platform
  • Wide range of education and research tools
  • Access to over 80 currencies to buy and sell
  • Leverage available up to 50:1
Cons
  • Cannot buy and sell other securities (like stocks and bonds)
  • Confusing margin requirements that vary by currency
  • Limited customer support options
  • Cannot open an IRA or other retirement account
Account Minimum
$50 USD
Pairs Offered
47
Get started securely through eToro’s website
Account Minimum
$50 USD
Pairs Offered
47
1 Minute Review

Though Australian and British traders might know eToro for its easy stock and mobile trading, the broker is now expanding into the United States with cryptocurrency trading. U.S. traders can begin buying and selling both major cryptocurrencies (like Bitcoin and Ethereum) as well as smaller names (like Tron Coin and Stellar Lumens).

eToro offers traders the opportunity to invest their assets into premade portfolios or cryptocurrencies, similar to services offered by robo-advisors through traditional brokers. Though eToro isn’t a one-stop-shop for everything an investor needs, its easy-to-use platform and low spreads is a great way to enter the cryptocurrency market.

Best For
  • International Forex/CFD Traders
  • New cryptocurrency traders looking for an easy-to-use platform
  • Traders who want to buy and sell cryptocurrencies on-the-go
Pros
  • Simple platform that is easy to master
  • CopyTrader feature that allows new traders to copy the same strategies used by professionals
  • Virtual dummy account that gives you $100,000 to practice trades
Cons
  • U.S. traders currently limited to cryptocurrencies
  • Only 15 major coins available to trade
Account Minimum
$100 USD (or equivalent)
Pairs Offered
69
Get started securely through HYCM’s website
Account Minimum
$100 USD (or equivalent)
Pairs Offered
69
1 Minute Review

HYCM is 1 of the world’s leading forex brokers, offering investors access to over 69 unique currency pairs. However, forex isn’t the only thing the broker offers — HYCM also offers high rates of leverage, stock and ETF trading, commodity investing and much more. Getting started with HYCM is quick and easy, and most investors can open an account in as little as 10 minutes.

HYCM offers a varying fee structure, which allows investors to choose the spread option that’s best for them. A wide range of educational and investing tools are available, which can be equally beneficial to both experienced and novice traders. Though HYCM isn’t currently available in the United States, it can be a great choice for residents of the other 140 countries where it offers service. 

Best For
  • Investors who want a customizable fee schedule
  • Traders comfortable using the MetaTrader platform
  • Islamic traders who need swap-free accounts that don’t build interest
Pros
  • Wide range of currency pairs available
  • Excellent selection of educational tools
  • $0 deposit and withdrawal fees
Cons
  • Not currently available to traders based in the U.S.
Account Minimum
100 EURO
Pairs Offered
50+
Get started securely through AvaTrade’s website
Account Minimum
100 EURO
Pairs Offered
50+
1 Minute Review

A fully regulated broker with a presence in Europe, South Africa, the Middle East, British Virgin Islands, Australia and Japan, Avatrade deals with mainly forex and CFDs on stocks, commodities, indexes, forex, cryptocurrencies, etc. This brokerage is headquartered in Dublin, Ireland and began offering its services in 2006. It offers multiple trading platforms and earns mainly through spreads.

Best For
  • Beginners
  • Advanced traders
  • Traders looking for a well-diversified portfolio
Pros
  • Controlled by regulatory agencies of multiple countries
  • Choice offered in terms of trading platforms
  • Support available in 14 languages and trading platforms in 20 languages
  • Practice/demo account available for trying out
  • Breadth of trading assets
Cons
  • Does not accept customers from the U.S. as it isn’t regulated in the U.S.
  • Transferring funds to the account may take up to five days; withdrawals could take up to 10 days

How Spreads Make a Difference in Forex Trading

Forex brokers, or the intermediaries through which you route your transactions, are compensated by spread, which is the difference between the ask and bid price. The bid and ask price are referenced from the perspective of a broker or a market maker.

Bids and Asks

The bid price is the rate at which a broker is willing to buy a currency pair, or in other words, the price at which a trader is willing to sell. The ask price is the price at which a broker sells a currency pair, or at which a trader is willing to buy. Invariably, bid price is lower than ask price.

The spread is usually denoted in pips, and is the smallest unit of price movement of a currency pair. A pip is the fourth decimal place in a currency quote.

Currency Quotes

A currency quote, which expresses the value of a currency versus another, has two components — the base currency and the quote currency. The currency mentioned first in a currency quote is called base currency and the one mentioned second is called the quote currency.

Assuming the EUR/USD pair has a bid price of 1.1363 and an ask price of 1.1365, the spread will work out to 2 pips. If you are trading a 10,000 EUR/USD lot, your total cost will be 10,000*0.0002, which equals $2.

Spreads

The spread is influenced by factors such as volatility, the volume of trading and liquidity. A wider spread is indicative of high volatility, especially ahead of the release of market-sensitive news, or in the wake of some geopolitical event that has bigger ramifications for the markets. It could also be due to a lack of liquidity.

Conversely, lower spread indicates low volatility and high liquidity.

If the spread widens appreciably when you hold a position, you’re likely to receive a margin call. Therefore, it is advisable to reduce the amount of leverage used or hold your position until the spread narrows.

The spread used in forex trading can be a fixed spread or a variable spread. A fixed spread is kept constant and does vary depending on market conditions. It’s usually set by dealing companies for automatically traded accounts. A variable spread, as the name implies, varies with market conditions.

What to Look for in a Low-Spread Forex Broker

Do some careful research; a promise of low spread may not always guarantee the lowest trading cost for a forex broker. Watch for these occurrences:

  • Most brokers offer different spreads for different account types. Some of these entice clients with the promise of a low spread but make up for it by charging a high commission. Therefore, ensure the pricing pitched to you includes all costs involved.
  • Be watchful when a broker promises a fixed spread. It could mean either a high spread or the broker may be up to something else to make up for the difference.
  • Some brokers who offer low spreads could charge a high minimum deposit.
  • When you have to make a choice among the brokers offering the lowest spread, look for brokers regulated in your country. In order to avoid extra transaction charges, it is always advisable that you trade with brokers, which offer a local mode of payment.

Our Top Picks for Lowest Spread Forex Brokers

Account Minimum
100 of your selected base currency
Pairs Offered
80+
Minimum Trade Size
$1,000
Spread
0.2 pips – 1.0 pips
Commisions
$0 – Variable starting at $60 per million traded depending on account
Best For
  • MetaTrader 4 users
  • Beginner forex traders
  • Active forex traders

1. FOREX.com

FOREX.com allows trading in over 80 currency pairs, indices, over 220 shares, commodities and cryptocurrencies.

The account types offered are standard and commission accounts. Cost of trading with a commission account is a low variable forex spread plus a flat $5 commission per standard lot chargeable at the time the trade is executed.

Typical spread for some of the major currency pairs are as follows:

  • EUR-USD: 1.2 pips
  • GBP-USD: 1.9 pips
  • USD-JPY: 1.3 pips
  • AUD-USD: 1.6 pips

FOREX.com has all three proprietary platform options, namely desktop, web and mobile. It also offers the widely used MetaTrader 4 platform. Currently, FOREX.com only offers spreadbetting in the UK.

Read Benzinga’s full FOREX.com Review

Best For
  • Beginning and intermediate traders
  • Those who prefer fixed spreads
  • Managing trading risks
  • News traders
  • Multi-asset and option traders

2. easyMarkets

easyMarkets is regulated by the CySEC in Europe and the ASIC in Asia. It is one of the best forex brokers, which also allows trading in precious metals, commodities, indices and cryptocurrencies.

easyMarkets does not charge a commission but earns out of the fixed spreads. The spreads for the EUR-USD pair can be as low as 1.2 pips, and the GBP-USD pair can have pips as low as 1.9, and these rates apply to the Super VIP account. For a Standard account, the spread could be 3 pips for the EUR-USD pair and 4 pips for the GBP-USD pair.

The different account types offered are Super VIP, VIP, Premium, and Standard, and the minimum deposit requirement ranges from $50,000 for the Super VIP account to $100 for the Standard account. Maximum leverage allowed for web trading is 1:200, and for trading through MetaTrader 4 is 1:400.

Read Benzinga’s full easyMarkets Review

3. Pepperstone

Pepperstone is an Australian online forex broker which allows trading in index CFDs, precious metals, energy and cryptocurrencies. Its standard account charges zero commission. The average spread for the EUR-USD pair is 0.16 pips, the USD/JPY is 0.25 pips and so on.

The Razor account is charged with a commission of AU$3.5 per 100,000 lot traded, and the average EUR-USD spread is 0 to 0.8 pips. The Razor account mandates an account minimum of AU$200 or its equivalent. There is no dealing desk involved, which gives traders direct market access.

Pepperstone is regulated by the U.K.’s Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC).

It offers 11 trading platforms, including MetaTrader 4 and cTrader, thereby providing the best trading software and tools on the market. A demo account is also offered so you can test out platforms and strategies.

4. IC Markets

IC Markets is also based out of Australia and allows trading in forex, bonds, stocks, commodities, cryptocurrencies, indices and futures. The firm offers 60 currency pairs and allows up to 1:500 leverage.

The average spread for IC Markets’ ECN account is 0.1 pips for the EUR-USD pair, 0.2 pips each for USD-JPY and AUD-USD pairs and 0.4 pips for GBP-USD pairs.

An ECN account facilitates using electronic communications networks for giving clients direct access to other participants in currency markets. Apart from the spread, a commission is also applicable. The MetaTrader 4 True ECN commission rates for a U.S. dollar-denominated account is $0.035 for a micro lot and $3.50 for a standard lot.

For a standard account, where only spread is applicable, the average spread for the EUR-USD pair is 1.1 pips, 1.2 pips for both USD-JPY and AUD-USD pairs and 1.4 pips for GBP-USD and 1.5 pips for USD-CAD and USD-CHF.

IC Markets provides traders access to the desktop, online and mobile versions of the MetaTrader 4 and MetaTrader 5 platforms as well as the cTrader platform. IC Markets is regulated by ASIC.

5. FXTM

FXTM, founded in 2011, is a broker that specializes in forex, CFDs, stocks, commodities and spot metals.

Standard accounts offered by FXTM are the regular standard account, cent account, which allows trading in micro lots and through MetaTrader 4 account and shares account. It also offers ECN, ECN Zero, and FXTMPro accounts, which has different spreads and commissions.

Spreads for a standard account start from 1.3 pips and that for the cent account from 1.5 pips, while the spread for the share account could be as low as 0.1 pips.

For ECN accounts, the spread for the regular ECN account starts from 0.1 pips, while the commission works out to $2 per lot. The ECN Zero account and the FXTMPro account do not charge commissions but the spread starts from 1.5 pips and zero, respectively.

The spread offered is floating and vary depending on the time of the day and the market conditions.

FXTM is licensed by the International Finance Services Commission, or IFSC, the CySEC and the FCA. It offers a demo account as well. The margin requirement floats between 1:25 and 1:1000, and the minimum deposit requirement is $100. The firm offers both MetaTrader 4 and MetaTrader 5 platforms.

Final Thoughts

Tighter spreads give forex traders an edge over the competition. Look out for hidden costs, including commissions, rollover fees for holding overnight positions, fees for data feeds, charges for not maintaining minimum account balance, etc.

As seen earlier, along with spreads and commissions, there are other factors that should be considered in order to realize maximum returns.

Get a Forex Pro on Your Side

Ready to tackle the global currency markets? IG’s award-winning services and technology gives you access to forex trading with leverage at low spreads so you can access rising and falling markets. Tap into fast execution on a huge range of markets, flexible access to more than 80 global markets, with reliable execution and an award-winning trading app. If you’re ready to achieve with a truly market-leading service, add IG to your team.

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