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Lowest Spread Forex Brokers For Cross Pairs

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On any trading platform, there are two prices for each financial instrument – the Bid and the Ask. When buying or going long, traders use the Ask Price, while the Bid Price is used for selling or going short. The difference between the Bid and Ask Price represents the spread. It is an income for the broker (fee), which is also a cost for the trader. Therefore, a lower spread would be much better for traders.

Besides offering the lowest spread on several popular Major Currency Pairs, some brokers also offer their lowest spread for Cross Pairs. Though these pairs are not as popular as Major Currency Pairs, some traders are willing to trade them because they provide bigger volatility. If you are interested in trading Cross Currency pairs, these lowest spread forex brokers for Cross Pair could be helpful.


Apr 17 2024

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Score Broker GBP/JPY EUR/AUD EUR/JPY EUR/GBP
Additional FAQ

Given the importance of spreads in day trading, it is essential to find a broker that offers low spreads. Lower spreads can help day traders reduce their trading costs, which in turn can lead to increased profits.

It is noteworthy that IC Markets stands out in this regard because it offers lower spreads compared to its counterparts. For instance, the average spread on the EUR/USD for IC Markets' standard account is around 0.62 pips while FP Markets' is around 1.2 pips.

Continue Reading at Broker for Day Trading: FP Markets or IC Markets?

The following is an example of the difference in spread between major and cross pairs that exist at the IC Markets broker:

Major Pair

Major Pair

Cross Pair

Minor Pair

Please see the example below to compare the profits you get when trading on major and cross-pairs.

Vicky opened 10 positions on EUR/USD with a spread of 0.6 pips, resulting in a total cost of 6 pips to cover the spread. Each time she opened a position, she targeted a profit of 10 pips. Therefore, the total profit obtained after the spread was 94 pips (100 - 6 pips).

On the other hand, Timmy opened 10 positions on AUD/CAD with a spread of 1.68 pips, resulting in a total cost of 16.8 pips to cover the spread. Similar to Vicky, he targeted a profit of 10 pips per position. Therefore, the total profit minus spread that Timmy got would be 83.2 pips (100 - 16.8 pips).

As you can see, even though they had the same number of trades and profit targets, the choice of currency pair can influence the eventual gain because of the spread differences. Vicky, who traded on a major pair, gained more pips. On the other hand, Timmy earned smaller profits due to higher spreads charged in AUD/CAD which is a cross pair.

Continue Reading at How Does Spread Affect Profit in Forex?

Most traded cross currencies involve JPY, which are AUD/JPY, GBP/JPY, EUR/JPY, and so on. The reason is that trading against JPY creates interest rate gaps which could result in more profits.

Another most traded cross currency is EUR/GBP. Both represent some of the largest economies in the world, so it makes sense that many people trade them. However, cross currency pairs relatively have small daily movements compared to major currencies, and so forex traders usually ignore them.

Continue Reading at Currency Pairs Characteristics in the Forex Market

The following are some of the differences in spreads on major and cross pairs:

  • Major currency pairs are the most liquid forex pairs, meaning many buyers and sellers are in the market. This makes major currency pairs the most profitable since they generally have the lowest spreads among other pairs.
  • Cross-currency pairs are less liquid than major currency pairs, leading them to be charged with higher spreads. The profit margin for cross-pair trading may be smaller due to this characteristic.

Continue Reading at How Does Spread Affect Profit in Forex?