Fixed Spread
Trading Costs
A fixed spread stays constant regardless of changing market conditions, giving traders cost certainty, though it usually starts wider than a comparable variable spread during normal, liquid market hours.
What is a fixed spread?
A fixed spread is a spread that a broker keeps constant, regardless of whether the market is calm or volatile, liquid or thin. If a broker fixes EUR/USD at 1.5 pips, a trader will see that same 1.5-pip gap between bid and ask whether it’s the middle of the quiet Asian session or the moment a major news release hits.
Fixed spreads are typically offered by dealing-desk brokers, who take the other side of client trades internally and can therefore quote a stable price without directly passing through the fluctuations of the wider interbank market.
Why brokers can offer a fixed price
Because a dealing-desk broker isn’t simply relaying a live feed from external liquidity providers, it can absorb short-term price fluctuations itself and hold the quoted spread steady. This gives traders a predictable, known cost per trade that doesn’t depend on timing or market conditions — useful for planning strategies where cost certainty matters, such as consistent position sizing across many trades.
The trade-off
Fixed spreads are usually set wider than the tightest variable spreads available during a market’s most liquid hours, since the broker needs a buffer to absorb volatility without losing money. And “fixed” isn’t always absolute: many brokers explicitly reserve the right to widen even a fixed spread during extreme volatility or very low liquidity — for example, around major economic releases or unexpected news — so it’s worth reading a broker’s specific terms rather than assuming a fixed spread never moves under any circumstance.
Why it matters
Fixed spreads suit traders who value predictability over the chance of an occasionally tighter price — for example, those trading news events who want to know their exact cost in advance rather than risk a spread spike at the worst possible moment. They also make it easier to calculate exact risk-reward ratios ahead of time. Traders should compare a broker’s typical fixed spread against the average variable spread of competitors, not just the lowest advertised variable figure, to judge which is genuinely cheaper for their trading style.
Quick recap
- A fixed spread stays the same regardless of market conditions.
- Common on dealing-desk broker models.
- Usually wider than the best-case variable spread, but more predictable.
- Many brokers can still widen a “fixed” spread during extreme volatility — check the fine print.