Costs, Spreads & FeesGuaranteed Spread
Fixed Spread
A spread the broker holds constant under normal conditions regardless of underlying market liquidity.
What Fixed Spread means
A fixed spread is set by the broker rather than derived tick by tick from a liquidity pool, and stays at its stated value through ordinary trading. Offering it requires the broker to take the other side of client trades and manage the resulting risk internally, since no external provider will commit to a constant price. The attraction for traders is cost certainty: the expense of entering and exiting is known in advance, which simplifies position sizing and makes automated strategies easier to model.
The commitment is conditional in practice. Broker terms almost always reserve the right to widen fixed spreads in abnormal conditions, and specifically around major economic releases, at the daily rollover and at the weekly reopen, which are precisely the moments a trader might have hoped the guarantee would matter. Fixed spreads are also usually higher than the average variable spread on the same pair, so the certainty is paid for on every ordinary trade.
Fixed pricing typically travels with instant execution, and the two are logically linked: a broker that commits to a price needs the ability to decline a stale request, which the trader experiences as a requote. Traders evaluating a fixed-spread offer should therefore look past the headline number to the requote frequency, the stated widening conditions and any restrictions on strategies such as scalping or news trading.
Worked example
A broker advertises a fixed 1.8 pip spread on EUR/USD, giving a known USD 18 cost per standard lot round trip, though the terms permit widening around scheduled data such as central bank announcements.
Related terms
- Variable SpreadA spread that changes continuously with market liquidity and volatility rather than being held constant.
- SpreadThe difference between the bid and the ask price, and the most common way a forex broker is paid.
- Instant ExecutionAn execution model in which the trader requests a specific displayed price and the broker fills or requotes.
- RequoteA broker's response offering a new price when the price the trader clicked is no longer available.
- Market MakerA firm that quotes both a bid and an ask and takes the opposite side of client trades from its own book.
Frequently asked questions
What does Fixed Spread mean in forex trading?
A spread the broker holds constant under normal conditions regardless of underlying market liquidity.
How does Fixed Spread work in practice?
The commitment is conditional in practice. Broker terms almost always reserve the right to widen fixed spreads in abnormal conditions, and specifically around major economic releases, at the daily rollover and at the weekly reopen, which are precisely the moments a trader might have hoped the guarantee would matter. Fixed spreads are also usually higher than the average variable spread on the same pair, so the certainty is paid for on every ordinary trade.
What is an example of Fixed Spread?
A broker advertises a fixed 1.8 pip spread on EUR/USD, giving a known USD 18 cost per standard lot round trip, though the terms permit widening around scheduled data such as central bank announcements.
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