Which broker has the lowest spread? The question is always missing half the sum

Search for this and you get dozens of rankings quoting “from 0.0 pips”. Almost all of them are missing
the same half of the calculation, and the missing half is often the larger one.

What a 0.0-pip spread actually means

It is the figure for a Raw or Zero account — the type that shifts cost from the spread into
commission. The spread is near zero, but you pay a
fixed amount per lot.

The number to compare is not the spread, it is the total:

Entry cost = spread converted to money + commission

An account with a 0.0-pip spread and $7/lot commission is more expensive than one with a 0.6-pip
spread and no commission ($6/lot) — even though the ranking puts the first one on top.

Three reasons spread rankings are always distorted

The published figure is the minimum, not the average

“From 0.0 pips” is the best ever recorded, usually at peak liquidity. What you actually pay is the
average across the hours you trade. Those two numbers can differ by a factor of two. This is why
nearly every spread comparison is
wrong.

Every broker measures over a different window

There is no common standard for the sampling period. Broker A may report a London-session average;
broker B an all-day average including the thin Asian session.

Spreads widen exactly when you need them not to

At a data release, spreads widen most. One lot of gold that costs $19 in normal conditions can be
eight times that in the thirty seconds around
the announcement. No ranking reflects this.

How to measure it yourself, more accurately than any ranking

1. Open the platform in the hours you actually trade, not the best ones.
2. Record the spread on your pair ten times over a week, spread across the days.
3. Take the average and convert to money: spread × pip value × size.
4. Add commission. Subtract the rebate, if you receive
   one.

The result is your real cost, in your hours, on your pair. It is more
trustworthy than any ranking because it measures the conditions you actually trade in.

The rebate reorders the ranking

This is the part almost no table accounts for. Net cost after the rebate:

Net cost = spread + commission − rebate

Wider-spread account types usually
pay a much larger rebate, because the IB commission
comes out of that same spread. Once the rebate is in the calculation, the order of brokers can reverse
completely against a spread-only ranking.

But do not over-correct either:
a high rebate does not mean the cheapest
broker. It is one term in a subtraction.

The question to ask instead

Not “which broker has the lowest spread”, but: for the pair I trade, the volume I trade and the
hours I trade, which broker has the lowest net cost.

That question is longer, but it has one correct answer — and the short one does not.

This article is for information only and is not investment advice. Conditions and fee levels are published by the brokers and can change at any time — check with the broker you actually use. Leveraged forex and CFD trading carries a high level of risk and can cost you your entire deposit.