Fixed or variable FX spreads?

At Capital Spreads we offer a vast range of FX pairs with fixed spreads* to help you to benefit from our incredibly tight dealing spreads.

The difference between the buy and sell prices for any given market is effectively your cost of trading that market. We aim to keep the spreads for all our markets consistently low, to give you the best value service.

Many companies offer spreads “from” 1 point or “variable” spreads that change throughout the day.

In the case of companies who offer variable spreads, you can expect a spread that will, at times, be as low as 0.8 points but then sometimes as high as five points, depending on the instrument being traded and the level of market volatility. 

At Capital Spreads we keep our FX spreads fixed even during the most volatile market movements. 

Fixed or Variable? What’s best for your trading strategy?

As with all aspects of trading, it is advisable to do your homework and research the best price out there.

There are both benefits and pitfalls of trading with variable spreads.  Some companies quote a headline “from a minimum of...” which at first glance may seem like a good deal. However it is worth comparing this minimum spread against their average spread; the average will in all likelihood give a truer indication of the spread you will see when you come to trade. This is because variable spreads will widen and fluctuate throughout the course of the trading day.

We also know that our clients are only interested in the spread at the time that they make their trade, an average for the day is often irrelevant. So we give you fixed spreads, all day, every day.

Depending on your trading strategy, variable spreads may suit you in quieter market times whereas fixed spreads may be much more advantageous during volatile market conditions. 

Example of fixed spreads vs. variable spreads

EUR/USD is trading at 1.3162 – 1.3163

Trader A and Trader B both believe that the euro will strengthen against the US dollar and both buy £10 a point on EUR/USD at 1.3163. 

Trader A buys £10 a point with Capital Spreads at 1.3163.

As these traders expected, the EUR/USD price rises to 1.3170 - 1.3171 and sells £10 at 1.3170.

Trader A makes £70 in profit.

However, Trader B places his bet with another company’s variable spreads and when EUR/USD has risen they find that the new higher price is quoted with a wider spread, for example 1.3169 - 1.3192.  When Trader B sells £10 to close at 1.3169 the profit is only £60.

Compare

Don't just take our word for it - compare our tight fixed spreads with our competitors and see for yourself.

*Throughout 2012 our spreads have been fixed 100% of the time during trading hours