Forex brokers get compensated for providing trading services to traders. This compensation is through different trading fees and charges.

There are basically three trading charges. One of them is the spread, and the others include commissions & swap fees.

Forex and other CFDs have two price quotes – the bid price and the ask price. The Spread is the difference between the bid and the ask price. The spread cost is measured in pips.

CFD brokers have different pricing and fees condition. Some charge swap and commission. Some charge one of the two or either. However, there is no broker that does not charge a spread on their CFD instruments.

As a trader, you have to know that the higher the spread, the higher the charges you incur. This is why we have reviewed for you, the best low-spread brokers in Australia.

Let’s see how they compare below.

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Comparison of Best Low Spread Forex Brokers in Australia

Broker ASIC Regulated AUD/USD Spread (pips) Commission Visit
Pepperstone

Yes
0.84 (Standard Account)
AUD3.50 per standard lot (Razor Account)
Visit Broker
IC Markets

Yes
0.77 (Standard Account)
AUD3.50 per standard lot (Raw Spread Account)
Visit Broker
FP Markets

Yes
2.0 (Standard Account)
$3 per standard lot (Raw ECN Account)
Visit Broker
eToro

Yes
1.00
No commission
Visit Broker

Note: The spread data & commission is as per information on these brokers’ websites in Apr. 2022.

Best Low Spread Brokers in Australia

Here the list of best low spread brokers in the Australia that we have reviewed:

  1. Pepperstone – Forex Broker with Lowest Spreads in Australia
  2. IC Markets – Low Spread Broker with cTrader
  3. FP Markets – Low Spread Broker with ASIC Regulation
  4. eToro – Low Spread Broker with Copy Trading
  5. CMC Markets – Regulated Forex Broker with Low spreads for majors

Risk Warning: Low spreads only guarantee low charges. It does not guarantee the safety of your funds. Only trade with ASIC regulated brokers to keep your funds safe.

#1 Pepperstone – Forex Broker with Lowest Spreads in Australia

AUD/USD Benchmark:
0.84 pips
Major Pair with Highest Spread:
NZD/USD (1.52 pips)
Minimum Deposit:
AUD 0

Pepperstone are regulated with ASIC so they are low-risk. Their two accounts – Razor Account and Standard Account come with different trading conditions and spread. The spread on the Razor Account is ECN type. The Standard Account has normal spreads.

Signing up with Pepperstone lets you open a Razor Account or Standard Account. The Razor Account has low average spreads for major pairs as shown below:

AUD/USD (0.24 pips), EUR/USD (0.17 pips), GBP/USD (0.59 pips), USD/CHF (0.49 pips), USD/CAD (0.47 pips), USD/JPY(0.26 pips), NZD/USD (0.52 pips).

If you choose the Razor Account, you will be paying a commission on your trades. The commission depends on your trading platform. On MT4/MT5, you will pay a commission of AUD 3.50 per standard lot (AUD 7 round-turn). On cTrader, the commission is $3 per standard lot.

You might also prefer the trading conditions on the Standard Account. Especially seeing that there is no extra commission per standard lot. However, the spreads are higher than that of the Razor Account. They are shown below:

AUD/USD (0.84 pips), EUR/USD (0.77 pips), GBP/USD (1.19 pips), USD/CHF (1.09 pips), USD/CAD (1.07 pips), USD/JPY(0.86 pips), NZD/USD (1.52 pips).

These trading conditions are competitive so the choice is yours. Razor Account or Standard Account.

#2 IC Markets – Low Spread Broker with cTrader

AUD/USD Benchmark:
0.77 pips
Major Pair with Highest Spread:
NZD/USD (1.38 pips)
Minimum Deposit:
AUD 200

IC Markets are considered low risk because of their regulation with ASIC. They also offer two account types. A Raw Spread Account with ECN condition and a Standard Account. Apart from spreads, IC markets also charge swaps and commission.

For IC Markets, the Raw Spread Account is ECN. The spreads come from about 25 institutional-grade investors. Also, there is no order distance restriction. The account is available on MT4, MT5, and cTrader with 61 currency pairs. IC Markets’ raw spreads for major currency pairs are listed below:

AUD/USD (0.17 pips), EUR/USD (0.02 pips), GBP/USD (0.23 pips), USD/CHF (0.19 pips), USD/CAD (0.25 pips), USD/JPY(0.14 pips), NZD/USD (0.38 pips).

You should also know that you will incur some charges if you choose this account. Spreads, Swap, and commission. You will pay them all. The swap for AUD/USD is AUD-2.3 (long) and AUD-1.1 (short). The commission depends largely on your choice of trading platform. The commission on MT4/MT5 is AUD 7 (round-turn). On cTrader, it is $6 (round-turn).

Now, let’s look at the Standard Account. The conditions are the same with the Raw Spread Account. The only difference is that the spreads are not raw. Also, there is no extra commission per standard lot and it is only available on MT4 and MT5 only.

You cannot open the Standard Account on cTrader.

The average spread for major pairs on the Standard Account is shown below:

AUD/USD (0.77 pips), EUR/USD (0.62 pips), GBP/USD (0.83 pips), USD/CHF (0.79 pips), USD/CAD (0.85 pips), USD/JPY(0.74 pips), NZD/USD (1.38 pips).

#3 FP Markets – Low Spread Broker with ASIC Regulation

AUD/USD Benchmark:
1.4 pips
Major Pair with Highest Spread:
NZD/USD (1.8 pips)
Minimum Deposit:
AUD 100

FP Markets are regulated with ASIC (AFSL Number 286354) . We consider them low risk. FP Markets support MT4 and MT5 only. No other trading platforms. They also offer two accounts and charge swaps. Commission depends on your account type.

You have two choices as per account type. The Raw ECN Account or the Standard Account. Let us break the accounts down briefly.

The Raw Account has an ECN-pricing execution with low spreads for major pairs as shown below. The spread begins from 0.0 pips.

AUD/USD (0.3 pips), EUR/USD (0.2 pips), GBP/USD (0.4 pips), USD/CHF (0.5 pips), USD/CAD (0.4 pips),
USD/JPY(0.3 pips), NZD/USD (0.6 pips).

Other fees attached to the account include USD $3 per standard lot (USD $6 round-turn). You will also pay a swap for AUD/USD – (AUD-2.27 for long positions, AUD-1.02 for short positions).

There is no extra commission per lot for the Standard Account and the spread begins from 1.0 pips. You will pay a swap for your overnight trades as well.

You can find the average spread for major currency pairs below:
AUD/USD (1.4 pips), EUR/USD (1.3 pips), GBP/USD (1.5 pips), USD/CHF (1.7 pips), USD/CAD (1.5 pips),
USD/JPY(1.4 pips), NZD/USD (1.8 pips).

#4 eToro – Low Spread Broker with CopyTrading

AUD/USD Benchmark:
1 pips
Major Pair with Highest Spread:
NZD/USD (2.5 pips)
Minimum Deposit:
$50

We consider eToro low risk because they are regulated with ASIC. The forex broker offers just one account type. Though their spreads begin from 1 pip, eToro has comparatively high spreads. They do not charge an esxta commission. But there are overnight charges

eToro offers 48 currency pairs with high spreads when compared to other brokers in this guide. Here is a glance at their typical spread for major fx pairs:

AUD/USD (1 pips), EUR/USD (1 pips), GBP/USD (2 pips), USD/CHF (1.5 pips), USD/CAD (1.5 pips),
USD/JPY(1. pips), NZD/USD (2.5 pips).

You will not incur any other trading fees other than the swaps. Also, if you compare eToro’s spread for NZD/USD to that of other forex brokers, that of eToro is higher (2.5 pips)

This is to further show you that eToro’s spreads are comparatively higher. Also, they have good conditions for copytrading.

How to Calculate Spread Costs

Spreads are trading fees. This means they affect your final profit or loss. This is why you should learn how brokers factor in spread costs in your overall trading fees.

Let us consider these hypothetical trading parameters. You want to buy 100,000 units (1 standard lot) of AUD/USD. The bid/ask price is 0.6933/0.6932 so your spread is calculated as:

0.6933-0.6932=0.0001 (1 pip)

Since you are buying a standard lot (100,000 units), your spread cost will be the number of units multiplied by the spread. Here is the calculation below

100,000 * 0.0001=$10.

For this trade, your spread cost is $10. This means when you open the trade, you begin with a $10. If you make a profit, the amount will be reduced by $10 when you close the trade. If your trade ends in a loss, an additional $10 will be incurred as spread cost.

So you see, the spread cost affect your trade whether you win or lose. This is why you should go for forex brokers with low spreads. Also, do not forget to check if the broker is regulated with the Australian Securities and Investments Commission (ASIC).

How to Check a Forex Broker’s Spread

Generally, forex brokers have their spreads on their websites. You only need to know how to find them. Before we walk you through it, know that it is good to check the spreads before opening your trading account.

Why?

Because spreads, like other trading fees, determine your final profit or loss when you close a trade. The essence of checking is for you to know if they are high or low.

Now let us proceed to our guide on how to check the spreads. Our example broker is FP Markets.

1) The first step is to enter the forex broker’s website. In this example, the website address is fpmarkets.com. This will bring you to the homepage.

CFD Broker's Homepage

Can you see the Australian flag at the top right corner? That generally means that the website you are visiting is for Australian clients. It is important so you don’t end up checking the data of that broker for another country.

2) Click on “Trading” (in the yellow box). You will get a dropdown with different sections. Under the “Pricing” section, click on “Spreads” (in the red box).

Forex Broker's Trading Fees

3) If you follow step 2 accurately, you will arrive at the picture below after scrolling down a bit. There are some explanatory notes about spreads on the page. You will need to scroll past them to get here.

Forex Broker's CFDs Fees

Here, click on the “view spreads” tab under forex.

4) You will find all the currency pairs and their spreads under the two account types. The page looks like the picture below:

Broker's Spreads for Currency Pairs

There are over 60 FX pairs in there. So use the “search bar” at the top right of the table for easy and quick navigation.

FAQs on the Best Low Spread Brokers in Australia

Which low spread broker is best in Australia?

Any forex broker with low spreads, especially ECN type account is the best. However, you should also verify if the forex broker is regulated with ASIC for the safety of your funds. ASIC Regulation with a Raw Spread Account is a good trading condition. According to our review, only Pepperstone, IC Markets, and FP Markets meet this criteria.

Which broker has the lowest spreads?

Out of the four brokers we compared in this guide, Pepperstone and IC Markets has the lowest spreads for major currency pairs. They have trading accounts which have Raw spreads from zero pips & are Commission based.

Are low spreads good in forex?

Low spreads are good in the sense that they reduce costs incurred from spreads. However, low spreads do not reduce the risks associated with CFD trading. This is why you should only trade with low spread brokers that are ASIC regulated.

Is there any Zero Spread Forex Broker in Australia?

Zero Spreads generally means the CFD broker will charge some sort of commissions to make profits from clients. For example, Australia forex brokers like IC Markets, FP Markets & Pepperstone, all have Raw spreads trading accounts, which generally have spreads from zero pips for majors. But there is an extra commission per lot.

For example, with Razor Account, the minimum spread for EUR/USD is 0 pips (0.17 on average), and the commission per lot is AUD 7 round turn (if your account base currency is AUD).

Which forex broker has the tightest spreads?

Pepperstone and IC Markets has the tight spreads for major FX pairs in Australia. For example, the typical spreads for major like EUR/USD is 0.77 pips with Standard Account at Pepperstone, and there is no extra commission per lot.

Pepperstone has spreads from 0 pips (AUD 7 commission per lot)Visit