## What is the spread, why is it needed?

There are always two prices in the market: sell price “Bid” and the buy price “Ask”.

Bid is always lower than Ask.

The difference between the buy and sell prices is called spread – a traditional commission for the transaction in any financial market.

Spread can be fixed and floating changing over time.

Spread value is usually caused by the currency pair liquidity (trading activity) and internal conditions of the particular broker.

In general, at any time spread value can be counted with a formula: Spread = Ask – Bid; if the Bid = 1.2484, and Ask = 1.2486, a spread in this case is 1.2486 – 1.2484 = 0.0002 or 2 points.

This “spread” is the main cost you will need to pay when trading Forex and CFDs.

If you plan to trade online for a long term, you should really know the spread cost of your broker as it can lead to a large amount of loss for your trading activity.

Point (Pip) is a minimal step of the price change. Thus, for the EUR / USD pair a quote change equal to 1 point corresponds to a change of the last (fourth) sign after the decimal point. For example, change from 1.2401 to 1.2402, or 1.2485 to 1.2486, etc. Quote change equal to 100 points is called a figure. Traditionally, for almost all currency pairs (EUR / USD, GBP / USD, USD / CHF, etc.), one point corresponds to the ten-thousandth of a quote, that is 0.0001, and only for USD / JPY course and cross-courses with Japanese yen – a hundredth which is 0.01. Please note that today the exact quotation up to 5th sign after decimal point is widely distributed, for example, when the quotation looks like 1.24849 for EUR / USD, or 89,948 on the USD / JPY. Obviously, in this case, one point will correspond to 0.00001, or 0.001 share of a quote.

Are you not satisfied with the broker you are trading with today? Switch to the following brokers today to save your money!

## 1. Deriv

Deriv offers its own trading platforms with deep liquidity.

The spread of EUR/USD offered on Deriv’s platforms starts from only 0.1 pips.

Deriv doesn’t reveal the spread condition on the official website, so in order to see the actual spread, you need to open an account with Deriv and log in to the platform.

Deriv offers one of the tightest competitive spreads in the industry.

Explore CFDs on Deriv MT5 (DMT5) and other unique platforms and enjoy low spreads to increase your returns when the market moves in your favour.

## 2. LMFX

LMFX is a MT4 Forex broker that offers both floating and Fixed spread types.

Each LMFX trading account offers a different approach in terms of spreads of individual products.

To make this clear and transparent, LMFX has lined them up side by side so that you can compare the structure of each at a glance in the Official Website.

There are mainly 3 trading account types offered by LMFX and each account has a different advantage:

LMFX Zero Account
The Zero Account offers the tightest spreads possible with fixed commissions on the Majors and Minors.

Aximtrade is a Forex broker with an unlimited leverage account.

With fractional pip pricing, you can trade with tighter spreads and enjoy the most accurate quoting possible on Aximtrade’s platforms.

Aximtrade strives to offer the service that suits both beginners and professionals.

Sign up on Aximtrade today to see one of the tightest spread in the market and the deep liquidity that allows you to execute traders without delays or slippage.

## 4. Exness

Exness is the largest Forex broker in the world by volume.

Exness also offers to trade on stable spreads but only for certain currency pairs.

Exness offers 2 types of spread as follows:

Instruments that offer stable spread nearly 90% of the time, excluding periods of market volatility, include: EURUSD, XAUUSD, GBPUSD, USDJPY, GBPJPY, USDCAD, AUDUSD, USDCHF, EURJPY, and EURGBP.

## 5. FXPro

FXPro offers competitive spreads across all platforms, with differences depending upon the account type you choose.

On the MT4 Raw Spread account, FXPro offers spreads without markup on FX & Metals, with a commission of \$3.50 per lot (commission is charged when you enter and exit a position.)

On the cTrader platform account, spreads on FX & metals are lower, with a commission of \$35 per \$1million USD traded.

Spreads are floating, which means they are variable and fluctuate according to market conditions, with the exception of the ‘MT4 Fixed’ account which offers fixed spreads on 7 major FX pairs during certain time periods.

For details of the Fixed spreads, please check the website specifications for EURGBP, EURJPY, EURUSD, GBPJPY, GBPUSD, USDCAD &USDJPY.

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