Every currency pair has two prices at any moment: the bid (the price a buyer will pay) and the ask (the price a seller wants to receive). The gap between these two prices is the spread, and it is measured in pips.
When you open a long trade (buy), you pay the ask price. When you close it (sell), you get the bid price. The spread is therefore an immediate cost on every position you open — before the market moves a single pip.
For major pairs priced against the US dollar, the pip value of one standard lot is $10. Use this formula:
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 stay the same regardless of market conditions. They tend to be slightly wider than the average variable spread, but they are predictable — useful for traders who want to know the exact cost before placing a trade. Market maker brokers often offer fixed spreads.
Variable spreads (also called floating spreads) widen and narrow with market liquidity. During major news events, the spread can spike to 10× its normal level. ECN/STP brokers typically offer variable spreads that are very tight during normal hours but widen at market open and around news 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 |
Spread varies significantly by currency pair. Major pairs (EUR/USD, GBP/USD, USD/JPY) are the most liquid and have the narrowest spreads — often 0.1–1.0 pips. Minor pairs (EUR/GBP, AUD/JPY) have slightly wider spreads. Exotic pairs (USD/TRY, EUR/ZAR) can have spreads of 10–50 pips or more, which makes short-term trading in them extremely expensive.
Market maker brokers act as the counterparty to your trade. They quote you a spread wider than the underlying interbank rate and pocket the difference. A broker quoting 1.0 pip on EUR/USD when the interbank spread is 0.1 pips earns 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.