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AuthorAuthor: Alison HeyerdahlPublished: November 22, 2021
EditorEditor: Vanessa MarcosUpdated: February 28, 2024

Last Updated On February 28, 2024

Alison Heyerdahl

Profit is central to a trader’s choice of broker. Wide spreads can eat into your profit, which is one of the reasons why both beginners and experienced traders often choose low-spread Forex brokers.

However, there are advantages and disadvantages to using brokers with this profile. Of course, these brokers have other sources of profit to compensate for their low spreads. Additionally, low-spread forex brokers might not suit every trader. In this guide, we’ll explain how low-spread brokers operate and generate revenue, and guide you in selecting an appropriate broker based on your individual trading needs.

The brokers below were selected based not only on their low spreads, but also on their low commissions, FCA regulation, and great trading platforms and trading tools.

These are the lowest-spread brokers in the UK for 2024.

  • Pepperstone - Offers a Wide Range of Trading Platforms, One of the Lowest Spreads Broker in the World, Fast Trade Execution on All Accounts
  • Tickmill - Low Commissions on Every Transaction, Fast and Free Deposits and Withdrawals, Great Trading Tools for All Traders
  • HF Markets - Low-cost Zero Account Available, Great Trading Tools For Charting And Trading, HF Markets Offers a User-friendly Trading App
  • XM - Top-class Education Content and Webinars, Exceptional Market Analysis Available, Low Trading Fees for All Traders
  • FXTM - Insightful Market Analysis, Low deposit Micro Account, and Great Education
  • Admirals - Low Commissions Account Available, FCA Regulation for All UK Traders, Spreadbetting Available in The UK
  • FxPro - Wide Range of Trading Platforms Available, Traders Can Access Over 2000 CFDs, Great Trading Tools for All Traders
  • Axi - No minimum deposit for any account, 140+ Forex Pairs, Metals, Indices and Shares CFDs, Comprehensive education content
  • Vantage - Raw ECN Account Starting at 0 pips, Regulated by FCA in the UK, Wide Range of Trading Tools
  • IG - Low Spread Accounts Available, Wide Range of Financial Instruments to Trade, Access to MT4 and the L2 Dealer for Traders
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Broker
Broker Score
Broker Website
Account Name
EUR/USD Spread
Commission
Trading Cost
Compare
Pepperstone
4.61 /5
Read Review
Visit Broker >
89%74- of retail CFD accounts lose money
cTrader Razor0.17 pips7 EUR / lotUSD 8.70
Tickmill
4.58 /5
Read Review
Visit Broker >
71% of retail CFD accounts lose money
Pro0.10 pips4 USD / lotUSD 5
HF Markets
4.45 /5
Read Review
Visit Broker >
72.83% of retail CFD accounts lose money
Zero Spread0.30 pips6 USD / lotUSD 19
XM
4.45 /5
Read Review
Visit Broker >
75.33% of retail CFD accounts lose money
XM Zero Account0.10 pipsSpread OnlyUSD 1
FXTM
4.37 /5
Read Review
Visit Broker >
81% of retail CFD accounts lose money
Advantage0.00 pipsAverage of $0.40 - $2 based on volumeUSD 4
Admiral Markets
4.28 /5
Read Review
Visit Broker >
76% of retail CFD accounts lose money
Zero.MT50.10 pips6 USD / lotUSD 7
FxPro
4.39 /5
Read Review
Visit Broker >
71.58% of retail CFD accounts lose money
FxPro cTrader0.40 pips9 USD / lotUSD 13
Axitrader
4.34 /5
Read Review
Visit Broker >
75.6% of retail CFD accounts lose money
MT4 Pro Account0.00 pips7 USD / lotUSD 7
Vantage FX
4.35 /5
Read Review
Visit Broker >
of retail CFD accounts lose money
Raw0.00 pips6 USD / lotUSD 6
IG
4.69 /5
Read Review
Visit Broker >
69% of retail CFD accounts lose money
Live Account0.85 pipsSpread OnlyUSD 8.50

How we chose the brokers with the lowest spreads

In this section, we’ll go through the criteria we used to choose the best low-spread forex brokers. These are pointers that can help you understand if a specific broker matches your trading style, the risk you are willing to take, and your budget specifications. Trading costs are just one of these factors. This is what we evaluate when comparing low-spread brokers:

  • We considered which UK forex brokers had the lowest spreads, combined with low commissions. Some of these brokers have zero-spread accounts, which can be quite an advantage for both beginner and experienced traders. We’ll go through these advantages further along in this guide.
  • We chose the brokers with the best regulation, i.e., regulated by entities like the UK’s FCA (the Financial Conduct Authority). The FCA is one of the world’s top regulators and has many rules that Forex brokers need to follow to protect traders.  
  • We analysed the trading platforms that each broker offers, including their ease of use, reliability and main features. We ensured that the platforms have good charting tools and real-time data feeds.
  • We evaluated the execution speed for each broker and chose only those with the fastest and most reliable execution. Trades should go through at the expected price. When trades are not filled on time, slippage can occur.
  • We assessed customer service: how knowledgeable they are, how fast they respond, and how you can get in touch with them. Also, their support needs to be available at least 24/5. Brokers who offer 24/7 services via many channels are better rated.
  • We considered any additional fees charged by the brokers. These include deposit and withdrawal fees, inactivity fees, swap fees, and currency conversion fees. No matter how low the spreads are, if your broker charges high additional fees, they could eat into your profit.
  • We only selected transparent brokers with a high trust rating and those with broker scores above 4 out of 5 stars. 

Our Broker Score and Trust Rating: Ensuring Your Broker’s Reliability

Choosing a broker you can trust with your money is a crucial decision. At FxScouts, we’ve developed two proprietary tools to assist you in this. Using extensive research on brokers and international regulators, we’ve designed an algorithm that provides each broker with a Broker Score and a Trust Rating.

Scoring and Review Process

Our review process is dynamic, not static. Understanding that brokers often modify their product offerings, we ensure our reviews are consistently updated with the most recent and accurate data. Brokers are scored in seven areas. In total, we consider over 200 individual metrics grouped into the following categories and weightings.

  • 20% – Trust Rating: This rating combines a broker’s regulatory oversight with feedback from traders and other members of the trading community. We NEVER work with brokers with a low Trust Rating.
  • 20% – Trading Conditions: The most important factor after trust is how much will your broker charge you. Trading conditions include the spread, especially on major currency pairs, and any commission for raw spread accounts. 
  • 17.5% – Platform and Tools: MT4, MT5, TradingView? All three? The more platforms and analysis tools the better.
  • 12.5% – Tradeable Assets: Traders want more than Forex, so the more assets to trade the better. Stocks, crypto, indices, commodities, bonds, ETFs, etc.
  • 10% – Deposit and Withdrawal: It should ALWAYS be free and easy to deposit and withdraw funds, but some brokers make this easier than others.
  • 10% – Education and Research: So many beginner traders fall at the first hurdle, the best brokers will make sure that new traders are educated and prepared for the markets.
  • 10% – Customer Service: High-quality, round-the-clock support throughout the work week is essential. The better brokers also offer weekend support and a dedicated technical team.

You can find out more about our in-depth review process here.

These are the best lowest spread brokers, as determined by our review process.


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AvaTrade
4.59 /5
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Tickmill
4.58 /5
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XM
4.45 /5
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Pepperstone
4.61 /5
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XTB
4.39 /5
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Pepperstone – Offers a Wide Range of Trading Platforms, One of the Lowest Spreads Broker in the World, Fast Trade Execution on All Accounts

Broker Score
4.614.61 / 5
🏦  Min. DepositGBP 0
🛡️  Regulated By
💵  Trading Cost 
USD 10
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Who is Pepperstone for?

If you want to trade in the UK with the lowest spreads, Pepperstone is the broker for you. Traders who rely on scalping and bots for automated trading will like it for its fast execution.

Why do we like it?

Pepperstone keeps costs low with some of the tightest spreads we’ve seen, averaging as low as 0.10 pips on the Razor Account.

Drawbacks

Pepperstone does not have its own trading platform, which means that you need to use a third-party platform. Also, outside countries with a Muslim majority, there are no Islamic accounts available.

Summary

Pepperstone is regulated by FCA in the UK. It offers access to the most reliable and popular trading platforms, including MT4, MT5, cTrader, and TradingView.

Pepperstone also stands out for its high-quality education and market analysis. With its commitment to transparency, trader education, and excellent customer service, Pepperstone consistently ranks among the best low spread brokers. In addition, Pepperstone does not require a minimum deposit to open a trading account.

Pros
  • Well regulated
  • Tight spreads
  • Great platform choice
  • Wide range of assets
Cons
  • Limited market analysis
AlertAccepts UK Clients. Average spread EUR/USD 1.00 pips with 0.0 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5 & cTrader platforms supported. Pepperstone is regulated by the FCA, ASIC, CySEC, SCB, CMA, BaFin and the DFSA. 75.6% of traders lose money with this provider.

Tickmill – Low Commissions on Every Transaction, Fast and Free Deposits and Withdrawals, Great Trading Tools for All Traders

Broker Score
4.584.58 / 5
🏦  Min. DepositGBP 100
🛡️  Regulated By
💵  Trading Cost 
USD 4
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Who is Tickmill for?

With some of the industry’s lowest-commission trading accounts, Tickmill is a cost-effective choice for traders, though with a limited selection of non-Forex assets, it’s more suited to those interested in the currency markets.

Why do we like it?

Tickmill stands out with two of the industry’s lowest commission accounts, the Pro Account, with a spread of 0 pips (EUR/USD) and a 4 USD (RT) commission and the VIP Account, also with a 0 pip spread, and a commission of 2 USD (RT). 

Drawbacks

Tickmill’s instrument availability is not impressive, with just above 200 assets available for trading, lower than many of its competitors. Also, unlike Pepperstone for instance, there is a minimum deposit requirement of 100 GBP to open an account. When it comes to the VIP account, traders need to maintain a 50,000 USD balance to keep their VIP privileges.

Summary

Tickmill’s solid reputation as a trustworthy broker stems from its regulation by top-tier international authorities, including the UK’s FCA.

The broker also offers swift and free deposits and withdrawals. Tickmill provides traders with some of the industry’s top trading tools, including Autochartist, various copy trading services, and a free VPS service.

Tickmill has a Zero Fee policy, reimbursing traders for any third-party fees charged up to 100 USD on deposits of over 5,000 USD.

Pros
  • Tight spreads
  • Well regulated
  • Fast and free withdrawals
Cons
  • Limited base currencies
AlertAccepts UK Clients. Average spread EUR/USD 0.00 pips with 4 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 platform support. Tickmill is regulated by CySEC, FCA, FSCA, and the FSA-Seychelles. 71% of traders lose money with this provider.

HF Markets – Low-cost Zero Account Available, Great Trading Tools For Charting And Trading, HF Markets Offers a User-friendly Trading App

Broker Score
4.454.45 / 5
🏦  Min. DepositGBP 0
🛡️  Regulated By
💵  Trading Cost 
USD 6
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Who is HF Markets for?

For traders who value advanced tools, and multiple platform options, HF Markets is a good option. The HF Markets Trading App enables smooth trading for busy traders on the move.

Why do we like it?

HF Markets’ Zero Account has competitive spreads that start at 0 pips (EUR/USD).

Also, the HFM App is modern, innovative, and intuitive.

Drawbacks

Access to some trading tools, like Autochartist, requires an account balance of 500 USD, which might not be at every trader’s reach. Other than the Micro account, with a minimum deposit of 5 USD, all other accounts request minimum deposits over 100 USD.

Summary

HF Markets offers an excellent range of trading tools, including Autochartist, VPS services, and Premium Trader Tools.

With FCA regulation, British traders can rest assured that their funds are segregated at local banks and they will benefit from negative balance protection and the FCA’s compensation scheme. Beginners will also benefit from HF Market’s UK customer support.

Pros
  • Well regulated
  • Excellent market analysis
Cons
  • Limited base currencies
AlertAccepts UK Clients. Average spread EUR/USD 0 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. HF Markets Group regulated by the FSCA, FCA, FSC, CySEC and the DFSA. 69.03% of traders lose money with this provider.

XM – Top-class Education Content and Webinars, Exceptional Market Analysis Available, Low Trading Fees for All Traders

Broker Score
4.454.45 / 5
🏦  Min. DepositGBP 5
🛡️  Regulated By
💵  Trading Cost 
USD 6
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Who is XM for?

Renowned for some of the lowest fees in the industry and excellent trading education, XM is a great choice for beginner traders in the UK. XM’s trading app is user-friendly and designed with the needs of beginners in mind, enabling seamless trading on the go.

Why do we like it?

XM is known for its competitive fee structure, with a spread of 0 pips on its Zero Account in exchange for a commission of 7 USD. XM’s educational output is also some of the best in the business.

Drawbacks

XM doesn’t have copy trading. It is also missing common trading tools available at other brokers such as Autochartist or Trading Central.

Summary

XM has some of the best educational and research resources in the industry and offers a few low-cost, low-spread trading accounts, all with a minimum deposit requirement of 5 USD.

XM provides excellent research and educational resources comprised of various sections, including its unique live education, daily Q&A sessions, videos, webinars, and Forex seminars.

XM further distinguishes itself with an expansive selection of trading tools.

Pros
  • Well regulated
  • Excellent education
  • Free deposits and withdrawals
Cons
  • Dealing desk
  • Wide spreads on its entry-level accounts
AlertAccepts UK Clients. Average spread EUR/USD 0.60 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. XM Group regulated by CySEC, ASIC, and the FSC. 75.33% of traders lose money with this provider.

FXTM – Insightful Market Analysis for All Traders, Low Deposit Micro Account Available, Great Education Material and Content

Broker Score
4.374.37 / 5
🏦  Min. DepositGBP 10
🛡️  Regulated By
💵  Trading Cost 
USD 15
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Who is FXTM for?

FXTM is an excellent choice for beginner British traders. provides a wide range of educational resources, including video and written materials, supporting the learning journey of new traders.

 Why do we like it?

FXTM’s Advantage Account has spreads starting at 0 pips on popular majors (EUR/USD, EURGBP) in exchange for a commission of between 0.4 and 2 USD.

Drawbacks

Unfortunately, FXTM charges a fee for all withdrawals, though depositing funds remains free. Another drawback is the absence of common trading tools like Autochartist and Trading Central.

Summary

FXTM is regulated by some top-tier authorities, including the UK’s FCA, under which British traders are onboarded. 

FXTM’s daily market analysis provides an insightful understanding of how news events impact the Forex market, helping beginners identify potential trading opportunities. It makes for an ideal starting point. 

Trading costs are higher than average on its commission-free Micro and Advantage Plus accounts, with spreads of 1.5 pips on the EUR/USD.

Pros
  • Good for beginners
  • Excellent education
  • Well regulated
  • Low minimum deposit
  • Copy trading accounts
Cons
  • Expensive withdrawals
AlertAccepts UK Clients. Average spread EUR/USD 1.50 pips on trading account with lowest minimum deposit. MT4 platform supported. FXTM Group regulated by CySEC, FCA, FSCA and FSC. 81% of traders lose money with this provider.

Admirals – Low Commissions Account Available, FCA Regulation for All UK Traders, Spreadbetting Available in The UK

Broker Score
4.284.28 / 5
🏦  Min. DepositGBP 250
🛡️  Regulated By
💵  Trading Cost 
USD 8
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Who is Admirals for?

Admirals, with its spread betting option, low spreads, and diverse platforms available, is great for traders with some expertise. It will please demanding traders in the UK who want advanced features.

Why do we like it?

The broker offers attractive trading conditions with spreads starting from 0.5 pips (EUR/USD) on its commission-free accounts and spreads of 0 pips (EUR/USD) with a 1.8 to 3 USD commission on its Zero Accounts.

Drawbacks

All deposits are free, but there is only one free withdrawal per month in all available methods. There aren’t many funding options either, in comparison to competitors. Withdrawals cannot be made to debit/credit cards either.

Summary

Admirals has built a strong reputation as a reliable global online broker and it is also licensed by the UK regulator, the FCA, strengthening its credibility in the British market.

Admirals, a global online broker with a high trust rating track record, has tailored its services to suit the needs of British traders. Offering support for MT4, MT5, and its proprietary mobile app, Admirals ensures a versatile and seamless trading experience. Traders from the UK have the

opportunity to open a spread betting account too. Available on MT5, spread betting traders can enjoy tax-free profits, a very appealing option for UK traders.

Admirals offers a range of low-cost accounts and has an excellent suite of trading tools.

Pros
  • Well regulated
  • Excellent education
  • Wide range of assets
Cons
  • Expensive withdrawals
AlertAccepts UK Clients. Average spread EUR/USD 0.80 pips with 0.0 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5 & MT4 Supreme Edition platforms supported. Admiral Markets is regulated by ASIC, CySEC, the JSC, and the FCA. 76% of traders lose money with this provider.

FXPro – Wide Range of Trading Platforms Available, Traders Can Access Over 2000 CFDs, Great Trading Tools for All Traders

Broker Score
4.394.39 / 5
🏦  Min. DepositGBP 100
🛡️  Regulated By
💵  Trading Cost 
USD 14
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Who is FxPro for?

Its selection of popular platforms, including MT4, MT5, cTrader, and its in-house Edge platform ensures flexibility and great features for serious and experienced traders.

Why do we like it?

On the MT4 Raw Spread account, FxPro offers zero spreads on Forex, with a commission of $3.50 per lot (commission is charged when you enter and exit a position.)

Drawbacks

On their mobile app, there are no technical indicators or graphical objects, a reduced number of timeframes, and only four chart types. Tools available do not include Autochartist nor TradingView, which is a bit disappointing for such a great broker.

Summary

Traders have access to an expansive selection of CFDs, including spread betting.

FxPro offers tight spreads and competitive trading conditions, enhancing potential profitability for traders. The broker boasts a varied selection of trading accounts and an impressive array of trading platforms.

Established in 2006, FxPro is known as a reliable broker within the Forex trading industry.

FxPro UK Limited is regulated by the Financial Conduct Authority (FCA), the UK entity for Forex regulation worldwide.

Pros
  • Well regulated
  • Great platform choice
  • Tight spreads
Cons
  • Limited education
AlertAccepts UK Clients. Average spread EUR/USD 1.40 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5, cTrader and FxPro proprietary trading platform supported. FxPro Group is regulated by FCA, CySEC, FSCA, and the SCB. 71.58% of traders lose money with this provider.

Axi – No minimum deposit for any account, 140+ Forex Pairs, Metals, Indices and Shares CFDs, Comprehensive education content 

Broker Score
4.344.34 / 5
🏦  Min. DepositGBP 0
🛡️  Regulated By
💵  Trading Cost 
USD 10
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Who is Axi for?

Axi offers traders free use of various powerful platform-integrated technical analysis tools, including Autochartist, MyFxBook, and PsyQuation. These will help experienced traders and serious beginners make better trading choices. 

Why do we like it?

Axi’s Pro Account offers spreads starting at zero pips, with a round-trip commission of 7 USD. There is also no minimum deposit, which makes trading with Axi simple and inexpensive.

Drawbacks

A main drawback for Axi is that MT4 is the only trading platform it supports.

Also, although it offers 70 forex pairs for trading, their total offer in terms of financial instruments is a bit underwhelming.

Summary

Founded in 2007, Axi is an FCA-regulated broker operating in the UK.

Apart from having a very comprehensive education section, with a series of eBooks about trading, blog posts, video tutorials, and a glossary of trading terms, the Axi Academy is also available for beginner traders as a course. All of these resources are free and available to all traders. Try out trading with a complimentary Demo account, equipped with US$50,000 in virtual funds, without any commitment.

If trading with a commission is not for you, there is also the Standard Account, with spreads starting from 0.9 pips, but no commission.

Pros
  • Low minimum deposit
  • Tight spreads
  • Innovative trading tools
Cons
  • MT4 only
  • Limited range of assets
AlertAccepts UK Clients. Average spread EUR/USD 1.00 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4 & MT5 platforms supported. Axi Group is regulated by the FCA, ASIC and the DFSA. 75.6% of traders lose money with this provider.

Vantage – Raw ECN Account Starting at 0 pips, Regulated by FCA in the UK, Wide Range of Trading Tools

Broker Score
4.354.35 / 5
🏦  Min. DepositUSD 50
🛡️  Regulated By
💵  Trading Cost 
USD 6
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Who is Vantage for?

Vantage supports both MT4 and MT5 platforms, and also TradingView. Having these options is a great advantage for exigent traders that are looking for premium conditions with a low spread. Traders can start by trading a minimum of 0.01 lots, which makes it accessible for low volume traders.

 Why do we like it?

On the Pro ECN account, the commission per lot is 3 USD round trip, 2 GBP round trip, and 2 EUR round trip. The Raw ECN account offers spreads starting from 0.0 pips, £0 deposit fees and a leverage up to 30:1.

Drawbacks

Their conditions are great for traders looking for a bargain, however, keep in mind that the minimum deposit for the Raw ECN account is 500 GBP. 

Summary

Vantage was founded in Sydney over 10 years ago, and now acts at over 30 international offices. When it comes to trading tools available, Vantage offers many useful tools in its suite such as VPS, economic calendar, Forex sentiment indicators, Market Buzz, and Forex calculators.

These conditions are great for savvy traders who want to keep their costs low and safe.

Vantage is a trading name of Vantage Global Prime LLP which is authorised and regulated by the Financial Conduct Authority of the UK.

Pros
  • Well regulated
  • Tight spreads
  • Fast and free withdrawals
  • Great platform choice
Cons
  • Limited assets
  • High minimum deposit on Pro Account
AlertAccepts UK Clients. Average spread EUR/USD 0.00 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, MT5 & Protrader platforms supported. VantageFX is regulated by the FCA, CIMA, VFSC & ASIC.

IG – Low Spread Accounts Available, Wide Range of Financial Instruments to Trade, Access to MT4 and the L2 Dealer for Traders

Broker Score
4.694.69 / 5
🏦  Min. DepositGBP 0
🛡️  Regulated By
💵  Trading Cost 
USD 6
⚖️  Max. Leverage30:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Who is IG for?

IG’s low spread on the DMA account might attract beginners. IG offers a comprehensive range of educational content for beginners and dabbling traders.

Why do we like it?

When it comes to trading fees, you can find a zero spread account (DMA) with a minimum spread of 0.17 pips. IG also offers a Live Account starting at 0.86 pips with no commission, and a spreadbetting account with a minimum spread of 0.60 pips, but with a round-trip commission of 6 USD.

Drawbacks

When it comes to third-party apps, the only platform supported is MT4. This is a bit disappointing for an otherwise very comprehensive broker.

Summary

IG also offers weekend trading on GBP/USD, USD/JPY, and EUR/USD. Spreads, however, are higher over the weekend.   

IG has one of the widest range of financial instruments to trade in the industry, with over 13,000 share CFDs and instruments that are hard to find at similar brokers.

It should be noted that the spreadbetting account has a minimum deposit of 250 USD.

L2 Dealer, designer by IG as a specialist platform, offers direct market access (DMA) free of charge, however, the traders must maintain a balance of 200 GBP.

This broker is also regulated by FCA, and the tight rules of this regulator improve its reliability for UK traders.

Pros
  • Well regulated
  • Tight spreads
  • Great platform choice
  • Excellent education
  • Excellent market analysis
Cons
  • High minimum deposit
AlertAccepts UK Clients. Average spread EUR/USD 0.85 pips on trading account with lowest minimum deposit. Max leverage 30:1. Islamic account available. MT4, ProRealTime and L2 Dealer platforms supported. IG Markets Group is regulated by FCA, ASIC, and the FSCA.

What is the Spread?

When learning to trade Forex, the spread is one of the first concepts you need to grasp. It affects your trading costs, which impacts your profit. The spread is the difference between the broker’s sell rates and buy rates when exchanging or trading a currency.

In other words, the spread is the difference between the bid price (the price at which you can sell) and the ask price (the price at which you can buy). Brokers charge spreads as a fee for enabling the trades.

Spread values can fluctuate a lot. Factors like the currency pair you are trading, the time of day, and the economic conditions that surround that pair can change your spread.

Why are low spreads important?

  • Cost Reduction: Low spreads can help traders to reduce their trading costs. Each time a trade is executed, the trader has to overcome the spread cost to get into a profitable position. The lower the spread, the less the price needs to move in the trader’s favour before they start to make a profit, and the more the price can move against the trader before they start to incur a loss.
  • Higher Frequency Trading: Traders, especially those using high-frequency trading strategies like scalping and day trading, must enter and exit the markets frequently. Lower spreads mean they pay less to execute these trades.
  • Increased Potential Profits: When the spread is lower, the distance to a profitable trade decreases. This can potentially increase a trader’s profitability, especially in volatile markets.

How do brokers with low spreads make money?

In the world of forex trading and other types of investment, brokers typically earn money in one of two ways: through spreads and commissions.

A spread is the difference between the buying price and the selling price of a financial instrument. The spread is essentially the broker’s profit on each trade a trader makes.

On the other hand, a commission is a fee that a broker charges for its services. This is generally a flat fee per trade or a percentage of the total volume of the trade.

Now, let’s consider brokers who offer low spreads. These brokers essentially offer to execute trades at prices very close to the market price. This can be attractive to traders because it reduces their trading costs. However, because these brokers make less money from the spread, they may charge a commission to compensate for the lower profit margins.

The commission can be seen as a fee for the broker’s service of facilitating the trade. For a broker offering low or even zero spreads, the commission may be their primary source of income.

The Advantages and Disadvantages of Trading with Low Spreads

Each broker is unique, but some main features distinguish low-spread Forex brokers. These are the main ones:

Advantages

  • Lower Transaction Costs:  The spread is the difference between the buy price and the sell price for a certain currency pair. The lower it is, the easier it is for traders to profit from a transaction. This results in lower transaction costs for the trader, especially for those engaged in high-frequency trading, such as day traders or scalpers and can increase the net profit from each trade.
  • Transparent Pricing: Low spreads coupled with a commission-based pricing model tend to be more transparent. The broker makes money from the commission, and the spreads are closer to the underlying market prices. This can provide a clearer view of the market conditions and facilitate better trading decisions.

What are the disadvantages of trading with low spreads?

There are, of course, some downsides to low spreads. The most important disadvantages to using low-spread forex brokers are the following:

  • Commissions Can Add Up: If you are a high-frequency trader, commission fees might get expensive as they add up. In these cases, it might be better to go for a higher spread with no commission.
  • Complex Fee Structure: Understanding and calculating costs can be more complex with a low spread and commission model. Traders need to consider both the spread and the commission in their cost analysis, which can be confusing, particularly for novice traders.

Whether a low spread and commission model is advantageous depends largely on the trader’s strategy and trading frequency. Each trader must understand their own trading habits, calculate their potential costs under different pricing models, and choose the broker that offers the most cost-effective solution for their specific needs.

What is the difference between fixed and variable spreads?

Fixed spread brokers offer spreads that do not change, no matter the market conditions, whereas variable spreads could be lower, but fluctuate throughout the trading day. 

In Forex trading, the difference between fixed spreads and variable spreads is quite important when deciding which broker to trade with. Here’s a breakdown of the main differences:

Fixed Spreads:

  • Consistency: Fixed spreads remain the same no matter the market conditions.
  • Predictability: Since these spreads don’t depend on the markets, they are predictable for traders. And predictable often means safer.
  • Market Makers: Fixed spreads are usually offered by market makers, who set both the bid and the ask prices for their clients, taking the opposite side (or the counterparty) of their trades. This means that when the trader wins, the broker loses, and vice versa.
  • Higher Costs During Low Volatility: While fixed spreads provide stability, when there is low market volatility, they may be higher on average. This leads to potentially higher trading costs.

Variable Spreads:

  • Market Conditions: Variable spreads fluctuate based on market conditions, including liquidity and volatility. This means the spread can be very low during times of high liquidity but can widen significantly during major economic announcements or market uncertainty.
  • Lower Costs Potentially: During periods of high liquidity, variable spreads can be lower than fixed spreads, potentially reducing trading costs.
  • ECN/STP Brokers: Variable spreads are often associated with ECN (Electronic Communication Network) or STP (straight-through processing) brokers, who pass the orders directly to liquidity providers without a dealing desk. This means traders are getting real market prices.

The choice between fixed and variable spreads depends on a trader’s strategy, trading style, and risk tolerance. Fixed spreads offer predictability and simplicity, which can be beneficial for beginners or those with straightforward strategies. Variable spreads, on the other hand, can offer lower costs under normal market conditions and are preferred by traders who can manage the risks associated with market volatility.

FAQs

What is considered a low spread at Forex brokers?

In the world of Forex trading, a spread is considered low if it’s close to 0.0 pips. However, what constitutes a ‘low’ spread can depend on the currency pair being traded. For major currency pairs like EUR/USD, a low spread is typically anything under 1 pip. For less liquid currency pairs like the minors or exotics like the USD/ZAR, spreads are usually considerably wider.

What is considered a low commission for a Forex broker account?

Commission rates can vary widely among Forex brokers, but a low commission is typically considered to be around 0.1% – 0.3% of the trade volume. In terms of fixed commissions, which are more common in ECN or STP brokers, anything around $6 – $10 per lot traded (100,000 units of currency) could be considered low.

Do some brokers offer zero-spread accounts? 

Yes, some brokers offer zero-spread accounts. Zero-spread forex brokers offer trading accounts where a currency pair’s bid and ask price are the same. This means there is no difference between the bid price and the ask price of a currency pair. However, it’s essential to note that while the spread is zero, these brokers often compensate by charging a commission on trades or using other fee structures. Therefore, traders must understand the overall cost of trading, not just the spread, before choosing a broker.

Are low-spread accounts suitable for all traders?

While low-spread accounts can save costs for high-volume traders, they might not be as beneficial for less active traders. This is because the commission costs could outweigh the benefits of low spreads for traders who don’t trade frequently.

Which Forex broker has the tightest spread?

The broker with the tightest spread is not constant, as spreads fluctuate based on market conditions and the broker’s policies. However, brokers that consistently offer tight spreads often operate using an Electronic Communication Network (ECN) or Straight Through Processing (STP) model.

Can I trade Forex without a broker?

While it is technically possible to trade forex without a broker, it’s not practical for most individuals. Brokers provide access to the trading platforms and the liquidity necessary to trade efficiently in the forex market.

What’s the difference between a raw spread and a standard account?

A standard account typically includes all trading costs within the spread. This means you won’t pay a separate commission on your trades. On the other hand, a raw spread account usually offers spreads close to zero, with brokers charging a separate commission on each trade. The choice between the two often depends on the trader’s strategy and volume of trades.

Which currency pairs have the lowest spreads?

The most heavily traded pairs, such as the EUR/USD, GBP/USD and USD/JPY, normally have the lowest spreads, while an emerging-market currency paired with the USD, such as the USD/ZAR, will have a wider spread. In other words, the more liquid the market, the narrower the spread. That’s because the high volumes traded generate lots of profit for brokers, even though the profit margins might be narrow. 

Forex Risk Disclaimer

Trading Forex and CFDs is not suitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products. Forex and CFD transactions involve high risk due to the following factors: Leverage, market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection. Traders should not deposit any money that is not considered disposable income. Regardless of how much research you have done or how confident you are in your trade, there is always a substantial risk of loss. (Learn more about these risks from the UK’s regulator, the FCA, or the Australian regulator, ASIC).

Our Rating & Review Methodology

Our overall Forex Rankings report and Directory of CFD Brokers to Avoid are the result of extensive research on over 180 Forex brokers. These resources help traders find the best Forex brokers – and steer them away from the worst ones. These resources have been compiled using over 200 data points on each broker and over 3000 hours of research. Our team conducts all research independently: Testing brokers, gathering information from broker representatives and sifting through legal documents. Learn more about how we rank brokers

Editorial Team

 

Chris Cammack
Head of Content

Chris joined the company in 2019 after ten years experience in research, editorial and design for political and financial publications. His background has given him a deep knowledge of international financial markets and the geopolitics that affects them. Chris has a keen eye for editing and a voracious appetite for financial and political current affairs. He ensures that our content across all sites meets the standards of quality and transparency that our readers expect.

 

Alison Heyerdahl
Senior Financial Writer

Alison joined the team as a writer in 2021. She has a medical degree with a focus on physiotherapy and a bachelor’s in psychology. However, her interest in forex trading and her love for writing led her to switch careers, and she now has over eight years experience in research and content development. She has tested and reviewed 100+ brokers and has a great understanding of the Forex trading world.

 

Ida Hermansen
Financial Writer

Ida joined our team as a financial writer in 2023. She has a degree in Digital Marketing and a background in content writing and SEO. In addition to her marketing and writing skills, Ida also has an interest in cryptocurrencies and blockchain networks. Her interest in crypto trading led to a wider fascination with Forex technical analysis and price movement. She continues to develop her skills and knowledge in Forex trading and keeps a close eye on which Forex brokers offer the best trading environments for new traders.

 

Vanessa Marcos
Financial Writer

Vanessa joined the team in 2023. Born and raised in southern Portugal, she has a BA in Journalism and a Master’s in Literary Theory, both from Lisbon University. Since 2011, she has worked in social media, copywriting, content management, ghost-writing, and SEO. Vanessa loves to write, and although she is a generalist in digital marketing, she always draws on her creativity in her work. She is constantly researching new subjects and finds the analytical depth of Forex trading fascinating.

 

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