Risk warning. CFDs and leveraged FX carry a high risk of rapid loss and a majority of retail investor accounts lose money. General information, not financial advice.
Every broker in this market advertises a spread, because a spread is a single number that fits on a landing page and looks comparable across firms. It is the most quoted figure in retail forex and one of the least useful, because the number on the page is a minimum observed under ideal conditions and the number you pay is an average across your actual trading hours.
This is a comparison of account structures rather than a league table of brands, for one reason: the cheapest account at a broker is usually a different question from the cheapest broker, and nobody can answer the second for you without knowing what and when you trade.
Why the spread is the wrong number on its own
Three things break the simple comparison.
"From" is not "typical". A headline of "from 0.0 pips" describes the tightest moment on the most liquid pair in the deepest hour of the day. It is not a lie and it is not an average. Comparing one broker's minimum against another's average is the single most common error in broker research, and it reliably picks the wrong broker.
A spread-only account has the fee inside it. Commission-free does not mean free. On a standard account the broker's markup is the spread, which is why a standard spread is wider than a raw one. The money has to be somewhere.
The spread is only one of four costs. Commission, overnight financing and slippage sit alongside it, and on a lot of realistic trading patterns any one of the three is larger than the spread.
The all-in cost formula
Put every account into the same unit — cost per standard lot, round turn, meaning open plus close — and the comparison becomes arithmetic instead of marketing.
On a pair quoted to four decimal places against the US dollar, one pip on a standard lot is $10. That is not a claim about any broker: a pip is 0.0001, a standard lot is 100,000 units, and 0.0001 x 100,000 = 10. So:
Cost per lot = 10 x (typical spread in pips) + (commission for both sides)
Then add, for a realistic picture:
- Swap, multiplied by how many nights you actually hold. On multi-day positions this routinely exceeds everything above it. Mechanics in forex swap and rollover fees explained.
- Measured slippage, in pips, converted at the same $10. This is the cost nobody publishes and the one you have to generate yourself — the method is in slippage in trading.
Two accounts can advertise the same spread and differ by a multiple once those two lines are filled in.
The three account structures, compared honestly
| Structure | Advertised spread | Separate commission | Where the cost actually sits | Suits |
|---|---|---|---|---|
| Raw / ECN | Very tight, floats with the market | Yes, per lot, usually both sides | Nowhere hidden — but the commission has a floor per ticket at some firms | Frequent traders, larger tickets |
| Standard / spread-only | Wider, floats with the market | None | Inside the spread markup, and it can widen when you least want it to | Occasional traders, very small tickets |
| Fixed spread | Fixed under normal conditions | Usually none | In the phrase "normal conditions" — fixed spreads can still widen or requote | Traders who value predictability over the last fraction of a pip |
Which structure wins is not a matter of opinion, it is the formula above run on your instruments. We work the crossover fully in raw spread vs standard account, when is it cheaper, and the short version is worth repeating here because it contradicts the usual advice: the comparison contains no volume term. Both structures scale linearly with lots traded, so if raw is cheaper for one lot it is cheaper for a thousand. Volume changes how much the difference matters, not which side wins.
What regulation fixes, and what it does not
It is worth being precise about which parts of your cost are set by rules and which are set by the firm, because they are routinely confused.
Set by rules for retail clients in the EU and UK: leverage, close-out and loss limits. ESMA's product intervention of 27 March 2018 fixed retail leverage at 30:1 for major currency pairs, 20:1 for non-major pairs, gold and major indices, 10:1 for commodities other than gold and non-major equity indices, 5:1 for individual equities, and 2:1 for cryptocurrencies. It introduced a margin close-out rule at 50% of minimum required margin, required negative balance protection per account, restricted incentives, and mandated a standardised risk warning carrying the provider's own retail loss percentage. The FCA made equivalent rules permanent from 1 August 2019, requiring firms to limit leverage to between 30:1 and 2:1, close out at 50% of required margin, guarantee a client cannot lose more than the funds in the account, and stop offering monetary and non-monetary inducements.
Not set by rules: the spread, the commission, the swap, the inactivity fee and the withdrawal minimum. Those are commercial, they differ between a firm's entities, and they change. Which is exactly why this page does not print them — every figure would be stale before you read it, and a wrong cost on a page like this is the one thing a reader acts on. ESMA rules explained and what FCA regulation means go through the protections in full.
The counter-argument: the tightest spread is often not the cheapest venue
This is the part a spread comparison cannot tell you, and it is frequently the decisive one.
A broker can advertise the tightest number in the market and still be the more expensive place to trade, if the fills are consistently worse than the quote. Slippage is not published, is not comparable across firms, and is worst exactly when it matters — at a data release, at a session open, on a gap. A quarter of a pip of consistent adverse slippage, on a strategy that trades often, dwarfs the difference between two brokers' advertised spreads.
The only reliable method is to measure it yourself. Log intended price, fill price and timestamp for every order for a couple of weeks, split the results by market condition, and check whether the surprises are symmetric or one-directional. Two weeks of your own fills tells you more than any comparison page, including this one.
The second counter-argument is about who this even matters to. If you place a handful of trades a month, the gap between a good raw account and a good standard account is small in absolute money, and you are better off choosing on regulation, platform and withdrawal terms. Spread optimisation is a high-frequency concern that has been marketed to everybody.
The bottom line
Compare all-in cost per lot, not advertised spread. Use typical figures at your own trading hours, add commission for both sides, add swap for the nights you actually hold, and then measure your own slippage before you scale up size. If the difference between two accounts is small once all four lines are filled in — and it often is — pick on licence, execution policy and how easily you can get your money out, not on the pip.
Next steps: how to choose a forex broker is the wider checklist, ECN vs market maker brokers explains the execution model behind each structure, and spread vs commission covers the two fee types in isolation.
Risk Warning
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 51-89% 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.
This article is general information, not financial advice. No spread or commission figure is quoted for any broker on this page: pricing is commercial, entity-specific and changes without notice. Take the current numbers from each broker's own pricing page and run the formula above.
Sources
- ESMA — agreement to prohibit binary options and restrict CFDs for retail investors, 27 March 2018 (leverage caps, 50% margin close-out, negative balance protection, incentives restriction, standardised risk warning): esma.europa.eu
- FCA — permanent restrictions on the sale of CFDs and CFD-like options to retail consumers, in force 1 August 2019: fca.org.uk
Frequently Asked Questions
Is a 'from 0.0 pips' spread the spread I will actually pay?
No. A 'from' figure is the tightest spread observed under ideal conditions on the most liquid instrument in the deepest hour of the day. What you pay is the average across the instruments and hours you actually trade, and it widens around scheduled news and at session boundaries. Compare typical spreads against typical spreads — comparing one broker's minimum against another's average is the most common error in broker research and it reliably picks the wrong broker.
Are low-spread brokers safe?
Spread and safety are independent variables and a tight spread tells you nothing about either the firm or your protections. Check which entity would onboard you, verify its licence on the regulator's own public register rather than on the broker's website, and confirm what leverage cap and compensation scheme that entity carries — protections follow the entity, not the brand.
Raw account or standard account — which is cheaper?
It is a per-lot comparison, not a volume threshold. Convert both to cost per standard lot round turn: for the standard account that is the typical spread multiplied by the pip value; for the raw account it is the raw spread multiplied by the pip value plus the commission for both sides. Because both scale linearly with lots traded, whichever total is smaller is cheaper at any size you trade. Run it on the current figures from your own broker's pricing pages.
