Types of spreads offered in standard trading accounts

Posted on 2023-04-17

Standard trading accounts typically offer two types of spreads: fixed and variable spreads.

Fixed spreads: A fixed spread remains constant regardless of market conditions and is generally higher than the variable spread. Fixed spreads are suitable for traders who want certainty in their trading costs and are not concerned about potential price fluctuations.

Variable spreads: A variable spread changes according to market conditions and is typically lower than the fixed spread. During times of high market volatility, the variable spread may widen, which can increase trading costs. However, during times of low volatility, the variable spread may be significantly lower than the fixed spread, which can reduce trading costs.

Traders should carefully consider the type of spread that best suits their trading style and the market conditions they are trading in.

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