At any moment a currency pair is quoted at two prices, like a dish with one price to buy and another to sell: the bid is what a buyer will pay, the ask is what a seller wants. The gap between them is the spread, measured in pips.
Buy (go long) and you pay the ask; close it out (sell) and you receive the bid. So the spread is a cost you swallow the instant you sit down, before the market has budged a single pip.
For the major pairs priced against the US dollar, one standard lot is worth $10 a pip. The recipe for the cost is simple:
Mini lots (0.1 lot) have a pip value of $1. Micro lots (0.01 lot) have a pip value of $0.10.
Fixed spreads are a set menu: the same price whatever the market is doing. They tend to sit a touch wider than the average floating spread, but you know the cost before you order, handy for traders who like certainty. Market maker brokers are the usual source.
Variable spreads (also called floating spreads) rise and fall with the day's liquidity, like ingredient prices at a market. Around big news the spread can jump to ten times its normal level. ECN/STP kitchens serve very tight spreads in the quiet hours that widen at the open and around data releases.
| Type | Typical EUR/USD | Pros | Cons |
|---|---|---|---|
| Fixed | 0.8-2.0 pips | Predictable, no slippage | Usually wider than variable |
| Variable | 0.0-1.0 pips | Tight during liquid hours | Can widen sharply during news |
| Raw/ECN | 0.0-0.2 pips + commission | Lowest average cost | Commission adds to cost |
The spread depends heavily on which pair you order. The majors (EUR/USD, GBP/USD, USD/JPY) are the everyday staples, deepest liquidity, tightest spreads, often 0.1 to 1.0 pips. The minors (EUR/GBP, AUD/JPY) cost a little more. The exotics (USD/TRY, EUR/ZAR) are the rare imports, at 10 to 50 pips or more, which makes short-term trading in them a very pricey habit.
A market maker broker is the counterparty across the table from you. It quotes you a spread wider than the raw interbank price and keeps the difference. Quote 1.0 pip on EUR/USD when the interbank price is 0.1 pips, and the house pockets 0.9 pips on every trade.
ECN brokers pass the raw interbank spread through to you (often 0.0 pips on EUR/USD) but charge a transparent commission per lot, typically $3.50-$7 per standard lot round-trip. This commission is how they earn revenue instead of marking up the spread.
Use our free broker check tool to see the EUR/USD spread for any of the 100 brokers in our database, or visit our ECN brokers comparison to compare raw-spread accounts side by side.
The spread is the difference between the bid price (the price a broker will buy your currency at) and the ask price (the price the broker will sell currency to you at). If EUR/USD is quoted as 1.08500 bid / 1.08503 ask, the spread is 0.3 pips. You pay this cost every time you open a trade.
For most pairs, 1 pip is the fourth decimal place. Spread = Ask − Bid. If the ask is 1.08503 and bid is 1.08500, spread = 0.00003 = 0.3 pips. For JPY pairs, 1 pip is the second decimal place.
A competitive EUR/USD spread ranges from 0.0 pips (ECN/raw accounts with commission) to 1.5 pips (standard accounts with no commission). Anything above 2.0 pips on EUR/USD is considered expensive. Verify current spreads with our free broker check tool.
Not always. ECN brokers offer 0.0 pip spreads but charge a commission per lot (typically $3.50-$7 per standard lot round-trip). You need to compare the total cost: spread cost + commission. For a 0.0-pip broker with $7 commission, the effective spread equivalent is 0.7 pips, competitive but not always the cheapest.
Last updated 2026-09-16. This article is for educational purposes only and does not constitute financial advice.