Question: What are pros and cons of "Fixed" and "Floating"(Variable) Forex spread?
Out of hundreds of online Forex brokers, variable(or floating) spread is more popular among them and you may be also used to see only variable spread with many brokers.
Normally, some Forex brokers also offer fixed spread along with variable one.
Sometimes some brokers offer only fixed spread to all its clients.
There are different advantage for both spread types.
Fixed spread
- Easy to calculate trading commissions
- Preferable for EA traders as it is easier to setup parameters
Cons of Fixed spread
- Spread is normally higher than Variable spread because traders need to premiums at all times
- Brokers may set restrictions on the platform
Variable(floating) spread
- Spread is normally tighter than fixed ones
- Brokers may allow any kinds of trading strategies
Cons of Floating spread
- Spread can go higher to a few dozens of pips during News Time or other high volatile situation
The above is the general conditions of Fixed and Variable spread with any Forex brokers.
There may be more conditions added by a broker, so please contact your broker’s official support to find out what is exactly different with them.