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Trading costs continue to decline each year as forex brokers compete to win you as a client and now even offer zero spread trading accounts as an extra enticement.
Be aware: Some zero spread account offerings can be marketing gimmicks to lure you in as a trader. It's therefore important to be able to read the fine print and understand what to look for when deciding which broker to choose. This guide covers the best zero spread forex brokers and explains what you need to know to choose the best option for your needs.CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 65% and 82% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
What is a zero spread account?
Zero spread accounts are trading accounts offered by brokers that have no difference between the bid and ask price, or spreads that average close to zero. However, there still exists the potential for spreads to widen, and there can still be added trading costs (commission, for example) depending on the broker and account you choose.
Trading with a zero spread makes it easy to enter and exit a trade without the need to worry about incurring trading costs, provided there are no additional commissions or fees.
Note: Even if there is a commission instead of spread, accounting can be easier when you know there was no spread when calculating trading costs, as commissions are usually shown on a separate column in most brokerage account reports.
Lowest Spread Forex Brokers
Here are the best zero-spread accounts, including brokers that offer spreads close to zero, available for 2021, based on 108 variables.
- Tickmill - Best overall for low costs
- FP Markets - Full MetaTrader suite, competitive pricing
- CMC Markets - Best web trading platform, excellent education
- Saxo Bank - SaxoTraderGO mobile app
- IG - Excellent education, most trusted
- IC Markets - Best overall for MetaTrader
- Ava Trade - Quality educational resources
Best overall broker for low costs
Tickmill is a plain vanilla MT4 broker offering a minimal selection of tradeable securities. That said, Tickmill offers very competitive commission-based pricing for professionals through its VIP and PRO accounts. Read full review
Full MetaTrader suite, competitive pricing
FP Markets' low effective spreads (Raw ECN account) combined with its platform add-ons and access to over 130 tradeable symbols is a winning combination in 2021. Like other best MT4 brokers, the full MetaTrader suite is available. Read full review
Best web trading platform, excellent education
When it comes to education, CMC Markets competes with the best in the industry by offering forex and CFD traders a diverse selection of education in a variety of formats, including written articles, video updates, podcasts, and live webinars. Education aside, the CMC Markets Next Generation trading platform is fast, reliable, and comes packed with tools and features. Read full review
SaxoTraderGO mobile app
For traders that can afford the USD 10,000 minimum deposit (GBP 500 for the UK), Saxo Bank offers competitive pricing, excellent trading platforms, brilliant research, reliable customer service, and over 40,000 instruments to trade. Read full review
Excellent education, most trusted - Visit Site
Regulated and trusted across the globe, IG offers traders the ultimate package of excellent trading and research tools, industry-leading education, competitive pricing, and an extensive list of tradeable products. This fantastic all-round experience makes IG the best overall broker in 2021. Read full review
Best overall for MetaTrader
IC Markets caters exceptionally-well to algorithmic traders through its commission-based accounts. Third-party research and trading tool plugins are part of the IC Markets MetaTrader platforms offering, making it our number one MetaTrader broker in 2021. Read full review
Quality educational resources
AvaTrade is a trusted global brand best known for offering traders an extensive selection of trading platform options. Our testing found AvaTrade to be great for copy trading, competitive for mobile, mostly in line with the industry average for pricing and research, and a winner for investor education. Read full review
How do you compare zero spread accounts?
When you compare accounts offered by the best forex brokers for zero spread trading, in most cases, spreads can still vary, and you may incur other trading costs such as commissions. It is, therefore, essential to keep the details in mind when reading the fine print for zero spread trading.
Forex brokers often offer multiple accounts, where certain features may vary, such as the execution method, the trading platform available, or range of markets, depending on the account you select.
Whether you are trading spot forex as a CFD or non-deliverable rolling contract, below we cover the key differences you should know when trading forex on margin with a zero spread broker.
Should I choose a zero spread account?
An account with zero spreads can make sense if your trading strategy is spread-sensitive or if you just want to reduce your trading costs as much as possible — but there are potential trade-offs.
Factors to keep in mind include any added commission and knowing if zero spreads are variable or fixed, especially during volatile market conditions when spreads may widen.
Consider that execution quality can suffer in a zero spread account if your trading strategy relies on specific execution qualities such as avoiding slippage (i.e., where your order can get filled at a worse price).
- Pros of zero spread pricing: A scalping strategy or other high-frequency trading program based solely on latency, or price delays that cause arbitrage, will likely require that you have lower costs (i.e., cost-sensitive) to be profitable.
- Cons of zero spread pricing: Conversely, other high-frequency algorithmic trading based on technical indicators can perform better on zero spreads, even if there are execution delays or price requotes during fast markets. However, this potential slippage also means that the effective spread can be greater than zero if your order is filled at a worse price.
About zero spread forex brokers
A zero spread forex broker attempts to offer a spread of zero pips. The spread is the difference between the bid price (where you can sell) and the ask price (where you can buy), measured in pips, which are fractions of a currency. These seemingly small trading costs can quickly add up because trading forex takes place from within a margin account (that is, uses leverage), especially as your trading volumes increase.
- Sample EUR/USD spread 10 years ago: 3 pips
- Sample EUR/USD spread today: 0.8 pips
- Sample EUR/USD spread at a zero spread broker: 0.1 pips
In the interbank market, where prices originate from major dealers, spreads are quoted in fractions of a pip, also known as fractional-pips. A zero pip spread may range from 0 to several fractions of a pip, or even more during volatile market conditions.
Zero spread investment offerings comparison
Using our forex brokers comparison tool, here's a summary of the spread pricing offered by the best zero spread forex brokers.
|Feature||Tickmill||FP Markets||CMC Markets||Saxo Bank|
|Average Spread EUR/USD - Standard||0.53 (August 2020)||1.14 (June 2020)||0.74 (August 2020)||0.8 (August 2020)|
|All-in Cost EUR/USD - Active||0.32 (August 2020)||0.61 (August 2020)||0.64 (August 2020)||0.6 (August 2020)|
|Active Trader or VIP Discounts||Yes||Yes||Yes||Yes|
Note: Brokers listed in the above table ranked best in class for Commissions & Fees in ForexBrokers.com 2021 review.
How does a zero spread forex broker earn money?
A zero pip spread that is fixed, and doesn't vary, will likely either include a commission; or the broker will be operating a dealing desk to attempt to make money when you trade, by being on the opposite side of each trade.
The way forex and CFD brokers earn money depends on their business model and available execution methods. All brokers will ultimately do one or more of the following:
- 1. Add a spread markup or earn a rebate (agency broker) when you trade with them as they route your order to a third-party market-maker in return for compensation.
- 2. Charge a commission (agency broker) in lieu of any spreads when routing your order.
- 3. Manage risk as a dealer (agency broker) (market maker) on zero spread accounts.
Pro tip: Some zero spread brokers combine some of these execution methods into a hybrid offering. Some brokers let you choose execution type from within your account or open an account specific to a particular execution method.
Which forex broker has the tightest spread?
Tickmill provides the tightest spreads (averaging 0.13 pips on the EUR/USD during August) from among the 27 brokers ranked in the ForexBrokers.com 2021 Annual Broker Review, after factoring in trading costs (i.e., any commissions). FP Markets follows closely in second place, also offering a nearly zero pip spread with a small commission added per trade.
Pro tip: When measuring forex spreads, the most accurate way to determine which broker has the tightest spread is to calculate the average spread for a given period, such as one month. In addition, it is important to factor in the trustworthiness of the broker to ensure you are provided with the best execution to pay the spread you deserve and avoid asymmetrical slippage, for example.
Which broker has the best spread?
Tickmill stands out as having the best spread because the overall cost you would incur to trade (spread + commission) is the lowest on average, based on August 2020 data using the EUR/USD pair. Other brokers might advertise a lower spread but be more expensive because they charge a higher commission or have higher average spreads.
Is a zero spread account good?
While it’s nice to avoid fees, a zero spread account can still end up costing you. Depending on your strategy and trading needs, a zero spread account might not be good for you if certain order types or execution methods are not available, for example. In addition, spread can potentially widen even in a zero spread account. The key is knowing what the average spreads are and whether there are any per-trade commissions. Consider these factors when choosing which account is best for you.
Can I trade forex without a broker?
No, forex trading is conducted from within a brokerage account, which provides you a certain degree of leverage (i.e., margin), along with access to a trading platform and range of currency pairs. You should always choose trusted forex brokers that hold proper regulatory licenses to avoid becoming a victim of scams.
Pro tip: For cryptocurrency users looking at forex trading with stablecoins, a decentralized exchange is also not a suitable option for forex; spreads can be significantly wider, and there is no mechanism to ensure the best execution even if zero spreads are advertised, which could result in extreme slippage.
Which forex broker is best for scalping?
IC Markets is an excellent forex broker for scalping. IC Markets is used by a significant number of algorithmic traders and provides both MetaTrader and cTrader platforms, where you run automated high-frequency trading programs such as scalping-based strategies and can even place orders in between the spread. And IC Markets’ Raw Spread Account features zero spreads, plus commission.
Pro tip: Whether brokers claim to offer Straight Through Processing (STP) or an Electronic Communications Network (ECN), these descriptions are not as important as how your broker's business model actually operates, including its order execution policy during fast markets when spreads can widen.
What's the difference between raw spread and a standard account?
A standard account refers to the smallest trade size of 100,000 units of currency, which is also known as a standard lot size. A raw spread refers to the cost of trading reflected in the bid/ask price, where the broker is not adding any markup but instead provides the price as is (i.e., raw spread) straight from their liquidity providers.
Pro tip: In most cases, raw spread forex brokers will add a per trade commission to make money or act as market makers.
The Best Forex Zero Spread Accounts 2021
Here's a summary of the best zero spread forex brokers.
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For our 2021 Forex Broker Review we assessed, rated, and ranked 27 international forex brokers. Each broker was graded on 108 different variables and, in total, over 50,000 words of research were produced.
While encouraged, broker participation was optional. Each broker had the opportunity to complete an in-depth data profile and provide executive time (live in person or over the web) for an annual update meeting.
All data submitted by brokers is hand-checked for accuracy. Ultimately, our rigorous data validation process yields an error rate of less than .1% each year, providing site visitors quality data they can trust. Learn more about how we test.
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"There is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses." Learn more.