Spread in Trading: Every trader enters the financial markets to make money. You can do so because you have a very good investment strategy or because your broker offers you the best rates on the market. Read on to learn which brokers offer the best trading spreads, how to lower your trading costs and which type of spread to choose for your strategy. So, what is a spread in trading?
What Is a Spread in Finance and Stock Trading? Definition
The spread is the difference between the buy price and the sell price (bid/ask). Put simply, it is the gap between the ask and the bid, as shown in the order book image below. This difference is how your broker gets paid for the trading services it provides.
A Simple Spread Trading Example
- Pair: EURUSD
- Quote : 1.1580 / 1.1582
- Spread: 2 pips (1.1582 – 1.1580).
Or an example from the index market:
- Instrument: CAC 40
- Quote : 4500 / 4501
- Spread: 1 point (4501 – 4500)
How much the spread matters depends on how often you trade:
- Long-term trading – trading costs have little impact on the trader’s final result, so the spread matters less.
- Day trading – investors who open and close positions on the same day need to watch their trading costs closely, as they have a significant impact on returns.
- Scalping – short-term speculators absolutely need competitive costs. We recommend that they study the tables below to find the best offers from reputable brokers.
Is It Possible to Trade Without a Spread?
Yes. Some types of brokers, such as ECN and STP brokers, can offer trading accounts with very low trading spreads, because these brokers (low-spread brokers) let you trade directly with their liquidity providers. They may even offer trading with no spread at all (zero-spread forex trading). In that case, of course, an additional transaction fee is charged on each position (on both the buy and the sell side).
Zero-Spread Brokers
Vantage offers its clients two types of Zero Spread accounts, Zero.MT5 and Zero.MT4, depending on the platform you want to use. You can open a zero-spread account with a minimum of €100.
You will pay no spread on the available assets, but you will pay a commission that varies by market. For example, it ranges from 1.8 to 3 USD per lot on Forex and from 0.05 to 3 USD per lot on spot indices. It is 1 USD for energies.
Types of Broker Fees, Spreads and Commissions
- Zero spread = interbank spread
- Negative spread – rare, and found only in arbitrage strategies
- Fixed spread – the broker absorbs market spreads and charges you a fixed amount
- Variable spreads – the broker adds its margin to the interbank spread and charges the total to the client
- Maximum spread – this does not exist: if the market experiences extraordinary conditions, brokers are covered by their terms and conditions (yes, even fixed-spread brokers) and will apply the market spreads at that moment
The Best Index Spreads and Fees in 2026
The index market is traded just as heavily as forex in France. For some brokers, index trading volumes are even higher than forex volumes. The most traded indices are the DAX 40, Dow Jones 30, Nasdaq 100 and S&P 500. Here are the index costs at the best brokers:
BROKER | DAX 30 | CAC 40 | DJI30 | S&P 500 | Nasdaq 100 | Nikkei 225 | Stoxx 50 | FTSE 100 |
|---|---|---|---|---|---|---|---|---|
 Try | 0.8 | 1.1 | 1.1 | 0.3 | 1 | 9 | 1.5 | 1.1 |
 Try | 1.5 | 1 | 3 | 0.25 | 1 | 10 | 1 | 1 |
 Try | 1 | 1.2 | 3 | 0.6 | 1 | 25 | 2.2 | 1.9 |
 | 2 | 10 | 6 | 0.75 | 2.4 | 10 | 3 | 1.5 |
P.S.: Spreads can change over time. For fully up-to-date information, please check the brokers’ websites directly.
The Best Commodity Spreads in 2026
BROKER | GOLD | BRENT | WTI | NATGAS | SILVER | PALLADIUM |
|---|---|---|---|---|---|---|
| Try | 0.32 | 0.036 | 0.027 | 0.005 | 0.032 | – |
| Try | 0.34 | 0.02 | 0.03 | interbank + 0.002 | 0.029 | interbank + 0.65 |
| Try | 0.35 | 0.04 | 0.04 | 0.015 | 0.041 | 20.5 |
| 0.45 | 0.05 | 0.05 | 0.01 | 0.05 | 20 |
P.S.: Spreads can change over time. For fully up-to-date information, please check the brokers’ websites directly.
What Is a Fixed Spread?
Fixed spreads never change with market conditions or other factors. The broker sets a rate for each asset it offers and that spread stays the same, which helps its traders anticipate their trading costs. Note, however, that fixed costs are not always guaranteed during periods of extreme volatility.
Spread Trading – Pros of Trading with Fixed Costs | Spread Trading – Cons of Trading with Fixed Spreads |
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What Is a Variable Spread?
Variable spreads change with market conditions. During major press releases, key data releases or periods of high volatility, spreads will widen. However, variable spreads are generally much tighter than fixed spreads, so you could end up saving money on your trading costs.
Spread Trading – Pros of Trading with Variable Costs | Spread Trading – Cons of Trading with Variable Spreads |
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Fixed vs. Variable Spread: How to Choose
There are many important factors to consider when looking for a broker, including security, platform reliability and customer service quality. But perhaps the most crucial is the transaction cost on the financial instruments you plan to trade.
After all, beyond the profitability of your trading system itself, the costs of your trades are one of the biggest drivers of your net return. Since the bid/ask spread is one of the most common trading costs, it is essential to choose the broker offering the best spreads for your type of trading.
There are different kinds of market spreads you need to understand to choose the right broker for your strategy. Depending on your investment approach and trading experience, you may prefer fixed or variable spreads.
Fixed Spread vs. Variable Spread: Which One to Choose?
While fixed costs are predictable regardless of market liquidity or volatility, variable spreads tend to lower overall trading costs when the market is calm. Tight, competitive spreads will be a significant advantage for your trading results.
Ultimately, though, the best spread structure for you depends on several factors:
- Your trading style
- Your risk appetite
- Your ability to react in a fast-moving market.
Execution quality should not be overlooked either, as it is particularly important for some traders, such as scalpers.
How to Calculate the Spread in Trading and How It Affects Your Costs
To measure the spread, compare the buy price and the sell price of the asset you are trading. The difference is usually measured in pips (as in Forex) or in points (as for indices), depending on the market.
Forex is always traded in currency pairs made up of two currencies. The first currency in a pair (on the left) is called the base currency, and the second (on the right) is called the quote currency. So in the EUR/USD pair, EUR is the base currency and USD is the quote currency.
Pair: EURUSD
Quote : 1.1580 / 1.1582
Spread: 2 pips (1.1582 – 1.1580).
If you open a position on this pair, you start by paying the spread, which is your transaction cost: here, the value of 2 pips on the pair.
A pip is the smallest unit of change in a pair (or the last decimal place of a quote): 0.0001 for most currency pairs, except those including the JPY, where one pip equals 0.01.
Diversifiez votre patrimoineInvestissez dans l’artDes tableaux originaux, pièces uniques signées par l’artiste. Un actif tangible, loin des écrans et des cotations.Voir les tableaux →Pips and Position Size
To understand how the spread relates to your actual transaction costs, you need to factor in the value of a pip (knowing how to calculate pip value) and the volume you traded. The value of a point on one forex lot (1 contract) is 10 units of the pair’s second currency. On EURUSD, for example, the spread is expressed in USD (the pair’s second currency):
| Forex pair | Forex spread | Contract size | Spread value |
|---|---|---|---|
EURUSD | 0.6 | 0.01 lot = €10,000 | 0.06 USD |
EURUSD | 0.6 | 0.1 lot = €10,000 | 0.60 USD |
EURUSD | 0.6 | 1 lot = €100,000 | 6 USD |
EURUSD | 0.6 | 5 lots = €10,000 | 30 USD (5*6) |
As the table shows, the spread cost is proportional to your position size.
Market Liquidity
An asset’s liquidity has a strong influence on its spread, which ultimately affects the brokerage costs a trader pays. The more an asset is traded, the easier it is to buy and sell, so the more liquid the market and the cheaper it is for traders to invest in it.
To find the best times to trade, you need to know the opening hours of the world’s stock exchanges.
Market Size
An important driver of the spread is the size of the market, or the trading volume of the asset.
If you trade the world’s major currencies, such as the US dollar, the euro or the Japanese yen, or popular stock indices like the DAX 40, the S&P 500 or the CAC 40, spreads will be tighter.
If you trade smaller, less popular markets, such as exotic currencies or markets representing developing economies, spreads will be wider.
Market Conditions and Economic Uncertainty
Market conditions have a significant influence on spreads. If an asset is volatile because of economic uncertainty, or because market conditions are fragile and hesitant, spreads will widen (in proportion to the risk).
For example, every decision by a major central bank, such as the Fed in the United States, the ECB in the European Union, the BoJ in Japan or the BoE in England, affects the supply of liquidity and the price of many assets. That is why spreads often widen when interest rate decisions are announced.
Government Policy
A country’s monetary, tax and fiscal policies can strongly influence investor demand for a particular currency or asset, which can affect market conditions. Spreads can therefore vary with the demand, volatility, liquidity and market volume resulting from these government policies.
Trading Hours
Trading costs are lower during the main trading hours. Spreads widen at night and outside the main trading sessions.
Broker Types and Spreads
The size of the spread can vary depending on the type of broker you use (market maker or ECN broker). An STP or ECN broker uses financial intermediaries to place its clients’ orders. These liquidity providers keep markets running smoothly and provide counterparties for traders.
They charge their own spreads to the brokers that use them. To make a profit, STP/ECN brokers widen the intermediary’s spread, which is known as applying a mark-up. Alternatively, they can pass on the liquidity providers’ spreads unchanged but charge an extra commission per trade.
Market maker brokers, by contrast, create the liquidity for the markets they offer themselves. They can therefore set whatever spreads they want based on their costs, the margin they want to make and the risks they face.
How to Lower Your Trading Costs: The Top Brokers
If you trade with variable spreads, you can reduce your total trading costs and improve your overall performance. You just need to know when to trade and which instruments to trade to get the best conditions.
If you have the choice, try to trade when volumes are higher, especially when several trading sessions overlap, such as London and New York.
By trading more active markets, you should get more competitive trading spreads than when trading at night, for example, when liquidity is lower. The same applies to the markets you choose: the more you focus on popular, liquid markets, the more attractive your trading costs are likely to be.
If you trade large volumes, talk to your broker about getting personalized trading conditions.