Spread

Updated 1 week Ago

Forex (Foreign Exchange) is the world’s most actively traded financial market, with a daily trading volume exceeding USD 7 trillion. The spread—the difference between the bid (buy) and ask (sell) prices—is the cost for traders to access the market. Smaller spreads reduce trading costs, while larger spreads increase costs.

FP Markets aggregates liquidity from multiple top-tier banks and non-bank financial institutions to provide traders with industry-leading ultra-low spreads, as low as 0.0 pips.

High vs Low Spreads

High Spread: Large difference between bid and ask prices, typically occurs during low liquidity or high volatility periods, such as news events or minor/cross currency pairs.
Low Spread: Small difference between bid and ask prices, commonly seen during high liquidity periods, such as major currency pairs traded in London and New York sessions.

Spread Calculation

Spread = Ask Price – Bid Price

Example:

EUR/USD Bid: 1.1251, Ask: 1.1252
Spread = 1.1252 – 1.1251 = 0.0001 pips

Pip: Abbreviation for “percentage in point,” the smallest unit of price movement in a currency quote.

Impact of Spread

Trading Cost: Larger spreads increase trading costs, especially for short-term traders (scalpers and day traders).
Market Reflection: Spread reflects liquidity, volatility, and news events. High-liquidity pairs have low spreads; low-liquidity pairs have higher spreads.

Fixed vs Floating Spreads

Fixed Spread: Constant regardless of market conditions; suitable for low-frequency traders.
Floating Spread: Changes dynamically with market supply, demand, and volatility. Typically lower during active trading periods.

FP Markets MT4/MT5 platforms use floating spreads sourced from major international liquidity providers. During high liquidity, spreads can be as low as 0.0 pips.

Examples

Low Spread Pairs: EUR/USD, AUD/USD
High Spread Pairs: EUR/TRY, AUD/MXN

FP Markets Spread Accounts

Raw Account: Spreads from 0.0 pips, USD 7 commission per lot
Standard Account: Spreads from 1.0 pips
Provides deep liquidity suitable for both retail and institutional traders

How to View Spreads on the Platform

Right-click anywhere on the MT4/MT5 chart
MT4: Select “Properties” (F8) → “General” → check “Show Bid Line”
MT5: Select “Properties” (F8) → “Display” → check “Show Bid Line”

Reference Spreads (Indicative)

Forex spreads: View
Precious metals spreads: View
Indices spreads: View
Commodities spreads: View
Cryptocurrency spreads: View