Fixed Spread Brokers – 2022
Finding a broker that offers low, fixed spreads is a critical component to becoming a successful (profitable) trader.
Always remember, the lower the spread, the cheaper it is to trade; and the cheaper it is to trade, the better chance you have of turning a profit!
Brokers with fixed spreads are different to variable spread brokers, in that they do not change their spreads throughout the trading day. This can be viewed as a massive competitive advantage.
Below we list the best fixed spread brokers and the benefits using fixed spreads.
Low Cost, Fixed Spread Broker Comparison:
What is a Fixed Spread?
To those new to online trading, the spread is the difference between the buy and sell price on a broker’s trading platform. For instance, if a broker is quoting the Wall St 30 index as 30,005 – 30,007, the spread is 2 points.
Every time you open a trade, you will pay ‘the spread‘ – this is the cost or commission that a broker earns from your trading activity. Always remember that the lower the spread, the cheaper it is to trade. The wider or bigger the spread, the more expensive it is to trade.
Moving on; there are two types of spread, fixed spread and variable spread.
A fixed spread, as the name implies, means the spread charge remains constant throughout the trading day, i.e. it is fixed and does not change, even in times of volatility.
With a fixed spread, you will always know how much you are going to pay when opening a trade. This means there will be no surprises as you will know (or be able to find out) the spread before you start trading.
A variable spread, again as the name implies, will vary depending on market conditions. Unlike fixed spreads, variable spreads do not remain constant and change all day long depending on market volatility and some other factors.
At certain times, variable spreads can be far cheaper than fixed spreads, however in times of extreme volatility, the opposite is more likely to be true (fixed spreads will be cheaper).
It is reasonably accurate to assume that most CFD brokers offer variable spreads.
Benefits of Fixed Spreads
There are many benefits in trading with a broker with fixed spreads, some of these are mentioned below.
Without a doubt, fixed spreads are far more transparent than variable spreads. Each time you go to make a trade, you will know how much you are about to be charged. Variable spreads simply do not offer that level of transparency.
When you know how much spread you are going to pay, there can be no unexpected surprises, all else being equal. This means you can factor these costs into your trading strategy.
In times of volatility, fixed spreads can safeguard you from increased trading costs. This is ideal for short term trading strategies.
Possible Disadvantages of Fixed Spreads
It is possible for your trade to be requoted with a fixed spread broker. Unfortunately, the faster the movement of pricing, the more common requotes become.
Another common issue is slippage. Again, this can be common when the markets are moving quickly due to volatility.
Recommended Fixed Spread Broker
Our recommended fixed spread broker is an easy decision. It is – TD365.com.
These guys are quite simply the cheapest broker going around and I would challenge anyone to find a consistently cheaper broker to trade with. Check out our spread comparison here for confirmation!
TD365 prides itself on being one of, if not, the lowest cost CFD broker. Not only that, they offer fixed spreads 24 hours a day, 5 days a week! Remember, with fixed spreads, you will always know how much you are going to pay to place a trade.
These guys are regulated in both Australia and The Bahamas. They can offer leverage of up to 200:1, although Australian applicants will be limited to 30:1 leverage, as per recent regulation changes.