What Are The Types Of Spreads In Forex?

The types of spreads that one would find when looking for a forex broker will depend on how the broker makes money.

There are two types of spreads:

1. Fixed
2. Variable (or floating)

What are Fixed Spreads? 

Market conditions do not affect spreads that are fixed. Said differently, whether the market is volatile or stable, the spread is not affected. It will remain the same. 

Advantages

• Smaller capital requirements
• Calculating transaction costs is more predictable 
• You will always know how much it will cost to open a trade 

Disadvantages 

• Requotes – This can happen because the price is coming from one source which is your broker. When the market is volatile and prices are changing at a rapid rate. Because the spread is fixed, the broker will

View our different forex account types with different spread requirements and sign up with Vault Markets today.