Best Brokers With Low Spreads

Author

Michael MacKenzie

Michael is a UK-based investment writer with over 10 years of experience in the journalism industry. Michael has critically evaluated many of the largest investment brokers in the UK, offering authentic insights.

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Editor

James Barra

James is a UK-based writer and investor with consultancy experience at some of Britain's largest financial organisations. James authors, edits and fact-checks content for a row of investing websites.

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Spreads are the difference between the buy and sell price of a security, such as a forex pair. Some of the best trading brokers will offer low or tight spreads, but they may charge additional commissions. Conversely, wider spreads can reduce your profit margins if you’re trading in large volumes.

This guide will explain what spreads are in detail and what affects them, as well as looking at how ECN brokers work. We also share helpful tips for comparing UK brokers that offer the tightest spreads. Read on for a list of the top brokers with low spreads in 2025.

How To Compare Brokers With The Lowest Spreads

It’s not enough to have tight spreads – our experts have found over decades of trading that any broker worth signing up with needs to perform well in the following areas.

Regulation & Trust

Regardless of the spread a broker charges, you should ensure that it’s trustworthy before risking a penny of your funds with it.

Regulation by a trusted organisation like the UK’s Financial Conduct Authority (FCA) provides a huge amount of credibility to brokers, which need to meet strict requirements to be granted a license.

If you opt to trade with an offshore firm that’s not regulated by the FCA, you can still get an idea of its credentials by checking which, if any, other bodies have granted it a license.

International regulators may not offer any protection to UK-based clients, but they can still help you tell a professional firm from a less serious one.

It’s a good sign if a broker has obtained licenses from one or more important international bodies like the Australian Securities & Investments Commission (ASIC), for example, while you should be more cautious about companies that have no licenses from any respected bodies.

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You should also check that the broker has been in operation for a significant period of time and check reviews from existing clients to gauge the user experience.

Competitive Spreads Across Assets

You need to research the spreads on specific assets you want to trade, because there’s a great deal of variation among different brokers on many assets.

Compare the spreads being offered by the broker against the average spread of the asset you wish to trade. For example, let’s say you want to trade the GBP/USD pair, and the industry-wide average spread is 1.7 pips.

If Pepperstone, for instance, offers an average spread of 0.38 pips on this currency pairing, this would be a very positive sign in this broker’s favour, whereas you would likely ignore a broker that offers a 2-pip average on this pair.

Brokers often advertise their minimum spread, which is often as low as 0 pips, but it’s more useful to check the average spread. Likewise, most brokers advertise their spread on very high liquidity instruments, like EUR/USD, which tend to have lower spreads.

For the most accurate assessment of fees, you need to check and compare spreads on the specific assets you want to trade, as these will often be a very different story.

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Commissions

Brokers often charge commissions on top of tight spreads, so you need to factor these in when you choose your low-spread broker.

Competitive commissions along with brokers that offer low spreads are best for reducing the overall cost of trading. Note, commissions are usually a fixed charge per trade or a variable fee based on trading volumes.

Additional Fees

To compensate for low spreads, brokers can also charge additional fees, such as overnight financing rates, withdrawal fees and currency conversion costs, so you need to take these into account when you compare brokers.

You should also look into hidden fees like inactivity charges, which usually kick in after an account remains idle with no trading activity for several months. These are charged monthly and will quickly chip away at your trading funds if you are an infrequent trader.

Market Access

If you are interested in trading in international markets such as the US or Europe, or specific asset classes such as cryptocurrencies, indices or commodities, ensure that your broker provides access to them.

To trade Nasdaq stocks, for instance, you need to choose UK brokers with very low spreads that offer access to that market, such as eToro.

Nowadays, most low-spread brokers offer a decent selection of forex pairs, plus stocks, indices, commodities and ETFs, so you should be able to find the instruments you want by shopping around.

Interactive Brokers is transparent about pricing across its huge range of assets

What Are Spreads?

Spreads are a key way that brokers generate profit. They are the difference between the ask price (sell) and bid price (buy) of an asset. The bid price can be taken as the demand for an asset, while the ask quote can be seen as the supply. The bid price is usually just above the market value of the asset, and the ask price is normally just below. The difference between the underlying value and the bid/ask price is profit for the broker.

Particularly with high volume trading, wide spreads usually mean that it takes longer for traders to make a profit. This is because the risk of trading the asset is higher due to the volatility in price.

Example

The difference between the ask and bid quote is measured in percentage in points (or pips).

So, if the ask price of Tesla is 899.34 and the bid price is 900.41, the spread is 1.07 points/pips.

AvaTrade Spreads

Types Of Spreads

• Fixed: These are spreads that remain the same regardless of changes in the market. Fixed spreads help traders calculate their potential profit before trading, and can also save traders’ money in markets that have a lot of price fluctuation. However, for stable markets, fixed spreads are not always helpful and can sometimes even cut into profits due to their unchanging position.
• Variable/Floating: The opposite of fixed spreads, variable spreads change with market conditions. When prices are less volatile and markets are more liquid, brokers will offer tighter spreads. When prices are more volatile and the markets are less liquid, the spread will be wider.

What Affects Spreads?

• Volatility: The volatility of an asset’s price creates confusion between buyers and sellers on what the actual underlying price should be. This instability causes bigger spreads. Traders can expect to see wider spreads on cryptocurrency and volatile forex pairs, whereas brokers with low spreads will typically offer the best price quotes on stable assets like gold.
• Liquidity: Assets in more liquid markets tend to have tighter spreads. This is because they can be more easily bought and sold, which means that online brokers are more confident in the price.

ECN Brokers & Raw Spreads

Electronic Communication Network (ECN) is a term used to describe the way that a broker manages and processes client orders. It is a Non-Desk Dealing (NDD) type of broker, meaning that the brokerage does not act as the counterparty to customers’ positions. Importantly, this also means more competitive spreads for traders.

Dealing desk brokers take the opposing side to traders, which means that they usually fix the bid and ask price to be profitable for themselves. This can often lead to spreads being wider and can create a conflict of interest as the brokerage profits from traders’ losses.

ECN brokers behave as the intermediary between traders and liquidity providers. This eliminates the conflict of interest. Liquidity providers then bid to trade with the investor, resulting in more competitive spreads.

Because of these benefits, ECN brokers often charge higher fees, for example, increased commission on each trade made and/or a higher minimum deposit amount.

Benefits Of Brokers With Low Spreads

• Trading in high volumes can have a lower overall cost
• If commissions are not too high, low spreads can help traders to improve profit margins

Drawbacks Of Brokers With Low Spreads

• It may not be beneficial to those who trade in low volumes, such as beginners
• ECN brokers often charge higher commissions for low spreads

Bottom Line On Brokers With Low Spreads

Brokers with low spreads are helpful for traders seeking to cut costs when investing. Spreads are one of the most common ways that trading platforms generate revenue, so it is useful to understand how to compare providers.

As a trader, you should look for the tightest spread possible to maximise your profit margins. However, brokers with the lowest spreads often charge additional commission fees, so it is important to paint a full picture of trading costs before opening an account.

See our list of the best brokers with low spreads to start trading today.

FAQs

How Do I Know A Broker With Low Spreads Is Not A Scam?

Check to see if the broker is FCA-approved. The Financial Conduct Authority enforces regulations that help ensure the safety of traders’ funds. You can check the broker’s licensing details on the official FCA register. The best-regulated investing firms also publish regulatory information on their websites.

How Do I Know If A Spread Is Good?

To ensure that your broker is offering competitive spreads, it is a good idea to compare their spreads with other online brokers. The lower the spread, the better, though also take into account any additional fees, such as commissions and overnight/rollover charges.

Do All Trading Brokers Charge A Commission?

Not all brokers with low spreads charge a commission on top. For example, Pepperstone only charges a commission with its CFD Razor account, while also offering commission-free trading solutions.

Why Are ECN Brokers Expensive?

ECN brokers often charge a higher commission because they provide tighter spreads. This is because the liquidity providers bid for the buyer’s order, which reduces the spread. Use our list of the best ECN brokers to find a reliable, low-cost provider.