Photo: Wikifx
In the forex market, the difference between the bid price and the ask price is known as the spread, the principal transaction cost of trading. Many platforms claim to offer spread-free trades with the goal of attracting investors, but are they trustworthy？
How do forex platforms make profits？
There are two methods for them to make money. First, they can charge a commission. These brokers probably make a commission by widening the spread on trades, while some may only charge the commission without considering the spread. Second, they can play the role of market makers and earn from the losses of investors. These brokers, however, will also charge a commission in case of investors bull run.
Is there a broker offering 0 spread？
Reliable platforms generate income from spreads. The zero spread will happen only when tradings on the Electronic Communications Network (ECN) are heavy. In this case, these platforms will charge a commission. While several platforms allow ECN accounts, the truth of the accounts remains to be discovered. With that said, platforms all aim to make money from investors, either through the spreads or by charging commissions.
It seems the commission-only ECN is more cost-effective. Investors are advised to stay away from platforms that claim to offer 0 spread and charge 0 commission.
Below is a list of the lowest spread forex brokers:
- Alpari
- FXTM
- GO Markets
- Exness
- Pepperstone
- BDSwiss
- FP Markets
- HotForex
Reprinted from Wikifx, the copyright all reserved by the original author.
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