Best Zero Spread Forex Brokers
| Forex Broker | Max Leverage | Min. Deposit | Spread | Full Reviews | Trade Now |
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500:1 |
$200 |
From 0.0 Pips |
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500:1 |
$200 |
From 0.0 Pips |
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400:1 |
$0 |
From 0.0 Pips |
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500:1 |
$200 |
From 0.0 Pips |
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300:1 |
$200 |
From 0.0 Pips |
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500:1 |
$0 |
From 0.1 Pips |
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500:1 |
$200 |
From 0.1 Pips |
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What does Zero Spread mean?
In the foreign exchange market (Forex) prices are represented as currency pairs or exchange rate quotation where the relative value of one currency unit is denominated in the units of another currency. An exchange rate, applied to a customer willing to purchase a quote currency is called “bid”. A price of quote currency selling is called “ask”, representing the lowest price that a currency pair will be offered for sale. Therefore, in Forex trading the difference between ASK and BID is called “spread”. A spread represents brokerage service costs and typically replaces transactions fees. Forex brokers applying a spread fee are called market makers but they are not the only type of broker available.
Zero Spread Forex Brokers are typically those that offer a STP (straight-through-processing) or ECN (Electronic Communications Network) broker model. They are the opposite of market makers as they do not operate a dealing desk (NDD). Instead, they fill clients’ orders without intervention and allow for direct access to the financial markets. This means that it is not the broker who sets the price but it is the market itself. ECN brokers provide traders with direct market access (DMA).
When a broker offers a trading account that has no difference in the BID and ASK price we call them zero spread accounts.
Are there any disadvantages to Zero Spread Accounts?
ECN trading with a zero spread account is typically more expensive than trading with a classic market maker broker where fees are charged through spread mark-ups (fixed spreads) on other account types (often called Standard Account). The best ECN brokers generally charge a commission on every trade placed which is economical beneficial for larger trades and higher frequency traders but not so much for retail traders with low volume. Commissions are often $2.50 to $5.00 per traded standard lot (the equivalent to 100,000 units of the base currency in a Forex trade).
Since traders are dealing directly with the liquidity providers liquidity requirements are high with ECN trading. In the market maker model, the market makers provide liquidity intervention on the trader’s behalf. With the ECN model on the other hand, the responsibility of meeting liquidity requirements rests on the trader themselves. As such, the account opening capital requirement for a true ECN account is commonly higher compared to standard trading accounts.
Other disadvantages may also include smaller or bigger leverage, higher minimum deposit requirements, a higher initial account opening size, non-application of Negative Balance Protection, tighter Margin Calls and Stop Loss Levels, or various permutations of the above.
How to choose the best Zero Account Broker?
As always, we recommend that you heed all risk warnings that come along with trading the markets and that you choose a broker that is licensed and regulated. ASIC (For Australian regulated brokers), FCA (UK), CySEC (Cyprus) or IFSC (Belize) regulated brokers are usually a good choice as they commonly guarantee safety of deposits and put client funds in segregated trust accounts with top tier banks.
You should also consider minimum deposit requirements, trading costs, spreads and which deposit and withdrawal methods are being offered. We have compiled a selection of the best zero spread account Forex brokers for you to choose from that all offer excellent trading conditions and low commission charges.
Conclusion
We choose IC Markets as our top True ECN and Zero Spread Account Forex Broker as they offer very tight spreads, low commissions, fast trade execution, a large selection of trading instruments and an overall stable and reliable trading environment. Fees and charges are completely transparent and as an ASIC regulated broker they can be considered trustworthy and professional.