- What Are Spreads?
- Why Are Low Spreads Important?
- Our Top Prop Trading Firms with Low Spreads
- Comparison Table of Prop Firms with Low Spreads
- Final Thoughts
Prop Firms with Lowest Spreads
What Are Spreads?
The spread is the difference between the bid (buy) and ask (sell) price when you are trading financial instruments such as forex currency pairs. Forex brokers charge you a spread on each trade that you place, which can immediately put your position into the red.
To calculate the spread in forex, you have to work out the difference between the buy and the sell price in pips. You do this by subtracting the bid price from the ask price. For example, if you’re trading GBP/USD at 1.32089/1.2091, the spread is calculated as 1.2091 – 1.2089, which is 0.0002 (2 pips).
Some brokers will also charge a commission fee on top of the spread, not to mention there might be delayed trade execution speeds which can cause slippage on your trades and lead to a different price than you might have expected. For this reason, prop firms with low spreads are favourable for those of you who might be using spread sensitive strategies, such as forex scalping.
Prop Firms with Lowest Spreads
Why Are Low Spreads Important?
Using a prop firm with low spreads is important because it can save you on trading costs. If you are day trading and placing multiple trades throughout the day, the costs can add up – especially if you are trading large position sizes which you might be with high leverage and a prop firm scaling plan. Even a few pips spread can costs hundreds and thousands over the course of a few trading days.
Tight spreads are important for scalpers who are targeting just a few pips on each trade. The difference in prop firm spreads can be the difference between a winning and losing trading strategy.
For example, if you had a profit target on each trade of 5 pips and the spread was 2 pips with a 2-pip commission and 1 pip slippage, you would need to make 5 pips to just break-even.
On the other hand, if you had a prop firm with low spreads starting from 0.0 pips, no slippage and a 2-pip commission, that same 5 pips would see 3 pips of profit on the trade.
On the other hand, there are some trading strategies that do not require tight spreads. If you are holding positions for a few days or weeks, then you probably wont really notice a big difference in spreads. You would probably be more concerned with finding a prop firm that allows weekend holding and has no time limit.
Prop Firms with Lowest Spreads
Our Top Prop Trading Firms with Low Spreads
OnlyFunds Review
OnlyFunds provide funded trading accounts with a large 90% profit share, along with straightforward and fair trading conditions to ensure a level playing field for all traders.
9.7
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FTMO Review
FTMO is an award-winning prop trading firm where you can take part in challenges to qualify to trade the company’s capital and receive up to $2 million in funds and keep 90% of profits. The company provide you with support along the way and will even cover the losses.
9.3
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The Funded Trader Review
The Funded Trader is a popular prop trading firm where aspiring traders can potentially unlock up to $600k accounts to become professional traders and earn a 90% share of the profits.
9
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SurgeTrader Review
SurgeTrader accelerates your path to becoming a professional trader by putting real capital into live accounts for you to trade. They have a good variety of funded trader programs where you can keep up to 90% of the profits if you successfully pass the audition phase and scale up to $500K.
9
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The 5%ers Review
The 5%ers give instant funding to successful traders. You can choose from various trading programs to show them you have what it takes to trade their capital up to $4 million and keep 50% of profits.
8.8
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Prop Firms with Lowest Spreads
Comparison Table of Prop Firms with Low Spreads
Prop Firms with Lowest Spreads
Final Thoughts
Low spread prop firms are important for anyone who is using a scalping strategy that is spread dependant. Even if this is not the case, you can still save on trading costs in the long run with tight spreads. Just keep in mind, this is not the only thing you need to look for when choosing a proprietary trading firm. You will also want to consider the trading rules, objectives, profit share and user feedback.
