Every market quotes two prices at once. The spread between them is how the market maker or exchange is paid for standing there. It is not billed to you as a fee; it is already inside the price, which is exactly why beginners underestimate it.
Spreads widen when liquidity thins - the daily rollover, the minutes around a news release, weekends in crypto. A pair that costs 0.2 pips in the London session can cost ten times that at 23:00. This is why advertised "spreads from 0.0 pips" tell you almost nothing: the word from is doing the work.
The mistake it causes: comparing brokers on headline spread alone. Compare the all-in cost - spread plus commission - at the hours you actually trade.
What the spread costs in practice
The spread is invisible because it is inside the price rather than on a statement. That makes it the most underestimated cost in trading. Here is the same EUR/USD trade at different spreads, on one standard lot where a pip is $10.
| Spread | Cost per round trip | 20 trades / month | Per year |
|---|
| 0.2 pips | $2 | $40 | $480 |
| 0.8 pips | $8 | $160 | $1,920 |
| 1.4 pips | $14 | $280 | $3,360 |
| 2.7 pips | $27 | $540 | $6,480 |
The last row is not hypothetical. HFM advertises Premium accounts from 1.4 pips; we measured 2.7 pips on EUR/USD during the London session from a funded account. Advertised and actual are different numbers, and only one of them leaves your account.
Why "spreads from 0.0 pips" tells you nothing
The word from is doing all the work. That figure usually refers to the best moment on the most liquid pair on the most expensive account tier, often with a commission attached that is quoted separately. The honest comparison is spread plus commission, measured at the hours you actually trade.
When spreads widen
- Session rollover, around 22:00-23:00 UTC, when liquidity thins between the New York close and the Asian open.
- News releases. Spreads can blow out by a factor of ten in the seconds around a central bank decision or inflation print.
- Weekends in crypto, and the minutes after a major listing or delisting.
- Exotic pairs, permanently. A pair like USD/ZAR carries a structurally wider spread than EUR/USD at every hour of the day.
This is why a strategy that backtests well can fail live: the backtest assumed one spread, and the strategy trades at the hours when the real one is three times that.
What to do about it
Trade liquid instruments during their own session, avoid holding through scheduled news if your stop is tight, and compare the all-in cost rather than the headline. If your target is smaller than two or three times the spread, the venue is taking most of the trade before price has done anything. Our forex broker reviews publish the spreads we measured ourselves, and mark anything unverified as testing in progress rather than estimating.
