Brokers With Low Spreads
Brokers with low spreads are often key to reducing trading costs, especially when carrying out short term trading such as scalping and day trading. Spreads are the difference between the buy and sell price, meaning high volume trading with wide spreads can quickly result in diminished trading capital, regardless of whether you’re trading forex, gold or crypto.
In this article, we explain what spreads are, how they are calculated and which factors influence them. We also list the best brokers with low spreads.
Best Brokers With Low Spreads
Our experts reviewed and compared hundreds of brokers and these 5 offer the tightest spreads:
#1 - Pepperstone
Why We Chose Pepperstone
Established in Australia in 2010, Pepperstone is a top-rated forex and CFD broker with over 400,000 clients worldwide. It offers access to 1,300+ instruments on leading platforms MT4, MT5, cTrader and TradingView, maintaining low, transparent fees. Pepperstone is also regulated by trusted authorities like the FCA, ASIC, and CySEC, ensuring a secure environment for day traders at all levels.
"Pepperstone stands out as a top choice for day trading, offering razor-sharp spreads, ultra-fast execution, and advanced charting platforms for experienced traders. New traders are also welcomed with no minimum deposit, extensive educational resources, and exceptional 24/7 support."
- DayTrading Review Team
- Instruments: CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto, Spread Betting
- Regulator: FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
- Platforms: MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade
- Minimum Deposit: $0
- Minimum Trade: 0.01 Lots
- Leverage: 1:30 (Retail), 1:500 (Pro)
Pros
- Pepperstone emerges as a low-cost broker, especially for serious day traders with spreads from 0.0 in the Razor account and rebates of 25%+ through the Active Trader program.
- Pepperstone boasts impressive execution speeds, averaging around 30ms, facilitating fast order processing and execution that’s ideal for day trading.
- Now offering spread betting through TradingView, Pepperstone provides a seamless, tax-efficient trading experience with advanced analysis tools.
Cons
- Pepperstone does not support cTrader Copy, a popular copy trading feature built into the excellent cTrader platform and available at alternatives like IC Markets.
- Despite enhancements to its range of markets, crypto offerings are relatively limited compared to other brokers such as eToro, with no option to invest in real coins.
- There’s no simplified proprietary trading platform, nor are there any social trading features, which could be a disadvantage if you are new to day trading.
#2 - IC Markets
Why We Chose IC Markets
IC Markets is a globally recognized forex and CFD broker known for its excellent pricing, comprehensive range of trading instruments, and premium trading technology. Founded in 2007 and headquartered in Australia, the brokerage is regulated by the ASIC, CySEC and FSA, and has attracted more than 180,000 clients from over 200 countries.
"IC Markets offers superior pricing, exceptionally fast execution and seamless deposits. The introduction of advanced charting platforms, notably TradingView, and the Raw Trader Plus account, ensures it remains a top choice for intermediate to advanced day traders."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities, Bonds, Futures, Crypto
- Regulator: ASIC, CySEC, FSA
- Platforms: MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade
- Minimum Deposit: $200
- Minimum Trade: 0.01 Lots
- Leverage: 1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global)
Pros
- With ultra-fast execution speeds averaging 35 milliseconds and deep liquidity, IC Markets provides an optimal trading environment for scalpers, hedgers, and algorithmic traders.
- As a tightly regulated and widely respected broker, IC Markets prioritizes client security and transparency, helping to ensure a reliable trading experience globally.
- IC Markets offers fast and dependable 24/5 support based on firsthand experience, particularly when it comes to accounts and funding issues.
Cons
- There are fees for certain withdrawal methods, including a $20 wire charge, which can eat into profits, especially for frequent withdrawals.
- Despite four industry-leading third-party platforms, there is no proprietary software or trading app built with new traders in mind.
- The breadth and depth of tutorials, webinars and educational resources still need work, trailing alternatives like CMC Markets and reducing its suitability for beginners.
#3 - Eightcap
Why We Chose Eightcap
"Eightcap delivers in every area for day traders with a growing selection of charting platforms and AI-powered tools. Now sporting 250+ crypto CFDs and the Crypto Crusher market scanner, it's also become a stand-out choice for crypto trading, winning our 'Best Crypto Broker' award two years in a row."
- DayTrading Review Team
- Instruments: CFDs, Forex, Stocks, Indices, Commodities
- Regulator: ASIC, FCA, xCySEC, SCB
- Platforms: MT4, MT5, TradingView
- Minimum Deposit: $100
- Minimum Trade: 0.01 Lots
Pros
- Eightcap stands out with a selection of powerful trading tools, including MT4 and MT5, the innovative algorithmic trading platform Capitalise.ai, and more recently the 50-million strong social trading network TradingView.
- Having excelled across all key areas for day traders, Eightcap outperformed more than 490 competitors to win our 'Best Overall Broker' award for 2024, also securing our 'Best Crypto Broker' title.
- After bolstering its roster in 2021, Eightcap offers one of the most extensive selections of cryptocurrency CFDs in the market, with crypto/fiat pairs, crypto/crypto pairs, plus crypto indices for broader exposure to the market.
Cons
- In spite of an increasing variety of tools, Eightcap doesn't offer industry favorites like Autochartist or Trading Central, which offer cutting-edge charting analytics, live news, and market insights for short-term traders.
- Despite a useful library of educational guides and e-books, Eightcap still trails IG’s comprehensive toolkit for aspiring traders with its dedicated IG Academy app and 18 course categories.
- Eightcap needs to continue bolstering its suite of instruments to match category leaders like Blackbull Markets with its 26,000+ assets, featuring a particularly weak selection of commodities.
#4 - LiteForex Europe
Why We Chose LiteForex Europe
LiteForex Europe is a CFD broker established in 2008 and authorized by the CySEC. The brokerage offers forex, commodities and indices via the MT4 and MT5 platforms. Spreads are ultra tight on ECN accounts and leverage is available up to 1:30 in line with EU regulations. LiteForex also offers a rich education centre for new day traders and social trading capabilities.
"LiteForex is a good option for active day traders with variable spreads from 0.0 pips, daily analysis and high-quality training guides. The forex copy system also lets you duplicate the positions of experienced traders."
- DayTrading Review Team
- Instruments: CFDs, Forex, Indices, Commodities
- Regulator: CySEC
- Platforms: MT4, MT5
- Minimum Deposit: $50
- Minimum Trade: 0.01 Lots
- Leverage: 1:30
Pros
- LiteForex offers a range of proprietary mobile app tools which are ideal for traders who want to analyze the markets on the go
- Low $50 minimum deposit makes LiteForex accessible for beginners
- Fast ECN execution model with low spreads from 0.0 pips
Cons
- Cryptocurrency trading is not offered
- Fees are fairly high, with spreads starting from 2.0 pips in the Classic account and $10 forex commissions in the ECN account
- There are limited funding methods compared to other brands
#5 - DNA Markets
Why We Chose DNA Markets
DNA Markets is a forex and CFD broker established in 2020. The broker operates two entities in Australia and the offshore jurisdiction, St Vincent and the Grenadines. Traders can access 250+ markets, with a Standard account for beginners and a Raw account for experienced traders. The reliable MetaTrader 4 and MetaTrader 5 platforms are available, alongside Signal Start.
"DNA Markets is an excellent choice for short-term traders familiar with the MetaTrader platforms. The smooth sign-up process also makes it easy to get started while the $100 minimum deposit is accessible. That said, DNA Markets trails the top brokers in education, research and mobile trading. "
- DayTrading Review Team
- Instruments: CFDs, Forex, Indices, Commodities, Stocks, Crypto
- Regulator: ASIC
- Platforms: MT4, MT5
- Minimum Deposit: $100
- Minimum Trade: 0.01 Lots
Pros
- Short-term trading strategies are permitted including scalping and automated trading using Expert Advisors (EAs)
- Convenient account funding with 7 base currencies, a $100 deposit and a wide range of payment methods
- 24/5 customer support with response times of <2 minutes during testing
Cons
- There are limited educational and research tools, reducing its appeal to beginners
- Despite access to MT4 and MT5, there is no proprietary trading app
- The investment offering trails alternatives, especially in terms of stocks, cryptos and commodities
Spreads Explained
A spread is the difference between the bid (buy) and ask (sell) price in trading. Often this results in the offer price sitting just above the underlying value and the sell price sitting just below it.
This is usually how brokers make a profit, although some will charge commission instead of or on top of spreads.
Because of this, spreads can quickly cut into trader’s available capital, especially when executing a large number of trades.
Calculating Spreads
Spreads are calculated by subtracting the bid price from the ask price.
This difference is measured by small price increments called pips (percentage in points) which is the fourth decimal point of a price (or second if trading forex pairs quoted in JPY).
For example, a forex pair with an ask price of 1.2323 and a bid price of 1.2330 has a spread of 8 pips.
Spreads are the difference between what the market is willing to sell and pay for an asset. If these prices are close, it means buyers and sellers agree on the value of an asset.
Fixed Vs Variable Spreads
Spreads can be either fixed or variable, with each type offering its own advantages. Fixed spreads allow the trader to develop more predictable strategies as the costs are known upfront.
This is especially useful when scalping, to understand what exit price is required to measure profit or loss. (Check your broker allows scalping prior to trading).
On the other hand, variable spreads can be tighter, especially when the asset is highly liquid.
The best type of spread therefore depends on the trading volume and time of day. Scalpers might choose variable spreads to try and get the best rates at certain points.
However, in volatile times, for example when trading news events, spreads can quickly widen.
Spreads & ECN Brokers
ECN brokers use Electronic Communication Networks to directly match buyers with sellers.
Because ECN brokers can combine prices from multiple market participants, the spreads are often tighter and may be the best bet for traders looking for brokers with very low spreads.
However, they charge a commission to carry out the trade, which is a fixed fee per transaction.
Influences On Spreads
Spreads are affected by several variables:
- The broker’s markup – this will differ from broker to broker but is not the only thing that should be considered. For example, a broker with tight spreads may also charge high commission fees or have high initial deposit requirements.
- Liquidity – a highly liquid asset is easier to buy and sell and will therefore usually have a tighter spread.
- Volatility – a highly volatile asset is more difficult to predict, resulting in wider spreads.
Examples of Brokers With Low Spreads
Here we review five of the top regulated brokers with the lowest spreads, across instruments including forex, indices and commodities.
Plus500
Plus500 offers variable spreads. The spreads are tight compared with other leading brokers, at an average of just 0.8 pips for EUR/USD (variable).
Additionally, Plus500 does not charge commission on CFDs, though it does have standard overnight charges, currency conversion rates and account inactivity fees.
Pepperstone
Pepperstone is an ECN broker offering spreads as low as 0 with their Razor account, though commission fees apply ($0.04 per 0.01 lots for EUR/USD). With the Standard account spreads are wider, but still low versus other leading brokers, with an average of 0.79 pips for EUR/USD and no commission fees.
Overall, Pepperstone is a great broker choice for traders looking to use the leading MT4, MT5 or cTrader platforms, with some of the lowest forex and gold spreads around.
CMC Markets
CMC Markets is a UK based broker that offers low spreads on a wide range of instruments including forex, commodities, stocks and indices. The EUR/USD spread of 0.7 pips is competitive, with commission fees charged on shares only.
There are also no minimum deposit requirements, making CMC Markets an excellent choice for traders looking for FX brokers with low spreads and straightforward account registration.
Eightcap
Eightcap is one of the best CFD and forex brokers with low spreads. On EUR/USD, Eightcap offers variable spreads starting from 1 pip with their Standard account, dropping to a minimum spread of 0 with their Raw account. However, commission fees are charged on the Raw account, unlike the Standard account.
XTB
XTB is one of the best CFD and forex brokers with tight spreads of just 1 pip (fixed) for EUR/USD and equally low spreads on indices such as NASDAQ. However, traders can qualify for even lower spreads with a discount of between 5 and 30% when trading higher volumes.
Final Word On Brokers With Low Spreads
Brokers with tight spreads help prevent fees from cutting into trading funds. While many leading brokers offer competitive spreads across a range of instruments, consider whether they are fixed or variable, as well as any commission fees that might be applied on top. The most suitable broker will depend on the time and frequency of the trade, as well as what is being traded.
FAQ
What Is A Broker With Low Spreads?
A broker with low spreads is one that has a small gap between the buy and sell rate. This is often how brokers make a profit though they can charge commission too.
Why Use A Broker With Low Spreads?
Using a broker with low spreads means the costs associated with your trade are lower, and your remaining balance is higher.
Which Brokers Offer The Tightest Spreads On Forex?
CMC Markets offers low variable spreads on forex pairs, while XTB offers some of the tightest fixed spreads. Pepperstone is an ECN broker that offers spreads as low as 0 pips with their Razor account, though this comes with commission fees.
Which Brokers Offer Low Gold Spreads?
The Pepperstone Razor account offers some of the lowest spreads for trading spot gold. Gold can be traded against USD, EUR, AUD, GBP, JPY and CHF.
Which Forex Brokers Offer The Lowest Spreads In Nigeria?
Pepperstone offers low spreads across a range of instruments including forex and accepts customers located in Nigeria.