Best Low Spread Broker UK – Cheapest Brokers Revealed

Inexperienced traders are often unaware of just how important it is to choose a low spread broker. After all, the spread is an indirect fee that you need to pay when you enter a trade – meaning that it will have an impact on your profit and loss figures. In this guide, we review the best low spread brokers of 2021.

Top 5 Low Spread Brokers UK 2021

If you’re looking for a quick summary of the top low spread brokers UK of 2021, check out the five providers listed below. You can read a full review of each broker by scrolling down!

  1. eToro – Best All-Round UK Low Spread Broker
  2. Libertex – Low-Cost Broker with ZERO Spreads
  3. Skilling – Competitive Spreads From as Low as 0.1 Pips
  4. Plus500 – Low Spread Broker for Forex Trading
  5. FXCM – Best Low Spread Broker for Small Deposits ($50 Minimum)

Best Low Spread Brokers UK Reviewed

On the one hand, choosing a broker that offers low spreads is super-important. However, you also need to look at what else the low spread broker offers in terms of commissions, payments, regulation, customer support, markets, and more.

With this in mind, we have done the hard work for you by reviewing the best low spread brokers of 2021.

1. eToro – Overall Best Low Spread Broker UK

If you’re looking for an all-round low-cost broker – eToro is by far the best option on the table. This is because the online trading platform allows you to trade heaps of asset classes commission-free, alongside tight spreads.

This includes traditional stocks ETFs, as well as CFDs in the form of hard metals, energies, cryptocurrencies, forex, and more. This means that when you place buy and sell orders on any of the aforementioned assets, it’s only the spread that you will pay.

In terms of the specific spread, this will vary at eToro depending on the specific asset that you are trading. To give you an idea, blue-chip stocks can usually be traded at a spread of less than 0.25%. Cryptocurrencies like Bitcoin typically carry a spread of 0.75%, which again, is very competitive.

The likes of gold are even more competitive, with spread usually hovering around the 0.05% region. Like many online brokers, the spread at eToro will vary throughout the day depending on market conditions. In terms of key features, eToro is a great option if you are looking to trade assets online for the first time. The platform is simple to use and minimum trade sizes start from $25. To learn more, read our eToro fees review.

You will, however, need to meet a minimum deposit of $200. You can do this with a debit card, credit card, e-wallet, or bank wire. eToro is also popular for its automated investment services – such as its CopyPortfolios tool. These are professionally managed portfolios that we’ll see the team at eToro buy and sell assets on your behalf.

eToro copy trading

You then have the Copy Trading feature, which allows you to choose an eToro investor that you like the look of. You can then elect to copy their trades like-for-like. Both the Copy Trading and CopyPortfolio tools are also commission-free, so you’ll still benefit from a low-cost investment experience.

eToro is also a great option if you are looking for a top-rated investment app. This is available on iOS and Android and offers the same features and tools as found on the main desktop website. In terms of safety, eToro is regulated by three financial bodies – the FCA, ASIC, and CySEC. US investors are also protected by the FSCS.

Pros:

  • Super user-friendly online broker and trading platform
  • Trade thousands of assets with tight spreads
  • 100% commission-free
  • You can also trade stocks, indices, ETFs, cryptocurrencies, and more
  • Deposit funds with a debit/credit card, e-wallet, or bank account
  • Social and copy trading
  • Accepts PayPal
  • Regulated by the FCA, ASIC, and CySEC

Cons:

  • Not suitable for advanced traders that like to perform technical analysis

67% of retail investors lose money trading CFDs at this site

 

2. Libertex – Low-Cost Broker with ZERO Spreads

If you are looking for the best low spread broker in its truest form, then Libertex wins hands down. This is because the broker does not charge any spreads whatsoever. To our knowledge, this is an industry first.

For example, if you wanted to trade EUR/USD – both the buy and sell price amounts to 1.21622, at the time of writing. Libertex offers zero spreads across all of its supported asset classes.

On top of forex, this also includes cryptocurrencies, commodities, ETFs, stocks, and indices – all in the form of CFD instruments. This means that all markets at Libertex allow you to go long and short. You can also obtain leverage at Libertex – which does go as high as 1:600 for professional traders. Libertex ZERO Spreads

In terms of the trading platform itself, you have two options at your disposal. If you are an experienced trading pro – then you might decide to use Libertex via MT4. On the other hand, if you are a newbie that is looking to learn the ropes, Libertex also offers its own propitiatory trading platform.

This is much more suitable for beginners. It is important to note that although Libertex offers zero spreads, it does charge a commission. This is the case across all of its support financial instruments – and will vary between 0% and 0.5%. When it comes to payments, Libertex supports debit cards, credit cards, bank transfers, and several e-wallets.

Libertex ZERO Spreads

Best of all, although the minimum first-time deposit is £100 – this goes down to just £10 on all future funding attempts. Finally, Libertex has been in the online trading arena for over two decades, and the platform is regulated by CySEC. 

Pros:

  • Zero spread CFD trading
  • Very competitive commissions
  • Good educational resources
  • Long established broker
  • Compatible with MT4
  • Great choice of markets

Cons:

  • Only offers CFDs

83% of retail investors lose money trading CFDs at this site.

 

3. Skilling – Competitive Spreads From as Low as 0.1 Pips

Skilling logoAlthough Skilling was launched as recently as 2019, the platform has already attracted a significant client base. One of the main attractions is that this low spread broker allows you to trade in a super cost-effective manner.

In fact, when trading major forex pairs – you can get your spreads down to just 0.1 pips. In addition to this, Skilling does not charge any trading commissions – as all fees are built into the spread.

In terms of what you can trade at Skilling, this low spread broker offers 800+ financial instruments. This covers major assets across the stock space, commodities, cryptocurrencies, and indices. The platform specializes exclusively in CFD trading markets, so you won’t own the underlying asset when you use Skilling.

skilling review

You will, however, be able to apply leverage on your chosen market, as well as choose from a long or short position. Although the main Skilling trading platform is popular with newbies, the broker also offers support for both MT4 and cTrader. This is great for experienced pros, as you will have access to advanced chart reading and analysis tools.

Skilling might be a young broker, but it is regulated by CySEC and the FSA and has full authorization from the FCA. If you like the sound of this low spread broker, Skilling requires a minimum deposit of just $100. You can fund your Skilling trading account with a debit/credit card, bank transfer, or e-wallet.

Pros:

  • More than 800 financial instruments
  • Commission-free share trading with tight spreads
  • Great for newbies
  • Supports algorithmic trading
  • Compatible with MT4 and cTrader
  • User-friendly mobile app for iOS and Android

Cons:

  • Does not support ETF trading

67% of retail investor accounts lose money when trading CFDs with this provider.

 

4. Plus500 – Low Spread Broker for Forex Trading

Plus500 LogoPlus500 is a major CFD trading platform that has grown to new heights in recent years. On top of a huge client base, its parent company is now listed on the London Stock Exchange.

Plus500 is also heavily regulated, with licenses from the FCA, ASIC, CySEC, MAS, and others. As a CFD trading platform, you will have access to a vast range of asset classes. This includes everything from stock CFDs, commodities, bonds, and ETFs.

However, it is the Plus500 foreign exchange department that stands out for us – especially in terms of spreads. For example, For example, you can trade EUR/USD with a dynamic spread of just 0.01% – which is very competitive.

plus500 spreads review

And of course – irrespective of which financial instrument you decide to trade at Plus500, this low spread broker does not charge any commissions. As a UK resident, you will also be able to trade with leverage when using Plus500. This is capped at 1:30 on major forex pairs and 1:20 on minors and exotics.

Other CFD instruments come with lower limits, so be sure to check this yourself. In terms of the trading platform, Plus500 allows you to access your account online or via a native iOS/Android mobile app. It doesn’t, however, offer support for third-party platforms like MT4/5 or cTrader.

As such, low spread brokers like Plus500 won’t be suitable if you want to engage in automated trading. Nevertheless, the minimum deposit at this broker is just £100. It supports a good range of deposit methods – including debit/credit cards, Paypal, and bank transfer. There are no deposit or withdrawal fees at Plus500 either, which is an added bonus.

Pros:

  • A commission-free trading policy
  • Tight spreads and low fees
  • A leverage ratio of up to 1:30
  • User friendly and easy to use trading platform, available on web browsers and mobile phones
  • Plenty of features including risk management tool, price alerts, and trader’s sentiment tool
  • Heavily regulated including a license by the FCA

Cons:

  • Not a social trading platform
  • CFDs only

72% of retail CFD accounts lose money.

 

5. FXCM – Best Low Spread Broker for Small Deposits ($50 Minimum)

If you are a complete newbie in the world of online trading, then we should suggest using a low spread broker that supports small deposits. Forex Capital Markets (FXCM) is one such option, as the platform requires a minimum deposit of just $50 – or about £40.

This is great for first-timers that want to explore how online trading works without risking a lot of money. FXCM is a lot more than just a low deposit broker, though. On the contrary, the platform offers heaps of CFD asset classes at super competitive fees. In terms of spreads, you can trade gold from just 0.05 pips, and EUR/USD from 1.4 pips.

Major indices are also very competitive, with the SP500 costing just 0.38 pips. Crucially, each and every market offered by this low spread broker can be traded commission-free. Once you open an account at FXCM and make a deposit, you can choose from several trading platforms.

FXCM forex trading review

This includes FXCM Station, as well as third-party platforms MT4 and cTrade. Supported payment methods at this broker include debit cards, credit cards, and e-wallets. In terms of safety. FXCM has a great reputation in the UK trading scene. The platform was launched way back in 1999 and is authorized and regulated by the FCA.

Pros:

  • FCA-regulated
  • Lots of currency pairs to trade
  • Choose from several trading platforms – including MT4
  • Supports EAs and forex robots
  • 0% commission on all assets
  • Tight spreads
  • You can also trade stock, crypto, oil, and gold via CFDs

Cons:

  • Minimum deposit of $360 for EU clients

There is no guarantee you will make money with this provider.

 

Low Spread Brokers Fees Comparison

If you’re looking for a comparison of the best low spread brokers that we have reviewed today – check out the table below.

Note: The figures below are based on the minimum spread offered by the platform on the asset class in question. Unless otherwise stated as a fixed spread, the spread can and will change throughout the trading day.  

Forex Stocks Gold Crypto Commission Fixed/Variable
eToro 0.008% 0.20% 0.05% 0.75% 0% Variable
Libertex ZERO ZERO ZERO N/A for the UK Up to 0.5% N/A
Skilling 0.00% 0.41% 0.016% N/A for the UK 0% Variable
Plus500 0.01% 0.25% 0.032% N/A for the UK 0% Both
FXCM 1.4 pips 0.09% 0.05 pips N/A for the UK 0% Variable

 

Low Spreads Explained – How to Find the Cheapest Broker

Whether you’re looking for a low spread stock broker, CFD broker, spread betting broker, or forex broker, It is crucial to remember that choosing a low-cost broker is about so much more than just fixating on the spread. For example, is the spread advertised by the broker available at all times, are only during busy trading hours? Additionally, although the broker might offer a low spread, what does it charge in commission?

Low Spreads Explained

All in all, there is a lot to take into account when searching for the best low spread brokers UK, which we elaborate on which more detail below.

What is the Spread and Why Does it Matter?

First and foremost, you need to have a firm understand of what the spread actually is and how it can impact your trading profit margins. In its most basic form, the spread is simply the difference between the bid and ask price of an asset.

  • In the case of the ‘bid price’, this is the price that buyers are willing to pay for the asset – based on the forces of market demand and supply.
  • The ‘ask price’, however, is the price that sellers are willing to accept for the asset they hold.
  • Naturally, there will always be a slight gap between the bid and ask price, as this is how online brokers ensure that they make money irrespective of which way the markets go.

For example, if your chosen low spread broker offers a spread of 1% on gold trading CFDs, this means that you are essentially looking at a loss of 1% as soon as the trade is executed.

This is because the price you paid to buy gold is 1% less than what you can sell it for. In other words, if you bought the gold CFD and sold the position immediately, your profit and loss on the trade would stand at negative 1%.

This is why it’s crucial to choose an online trading platform that offers competitive spreads. After all, the wider the spread, the more you will indirectly pay in trading fees.

Spreads in Pips or Percentages?

Once you know how the spread actually works, it’s then time to get comfortable with how this is calculated. This is because there are two ways in which online brokers advertise the spread.

  • For example, when using the best low spread forex brokers, the likelihood is that the platform will display the spread in ‘pips’.
  • For instance, if GBP/USD has a bid and ask price of 1.3240 and 1.3241, respectively – the spread on this market can be identified as 1 pip.

However, in the case of stocks, ETFs, commodities, cryptocurrencies, and most other asset classes – it’s actually industry-standard to calculate the spread in percentage terms. This actually makes it a lot easier to assess whether or not you are getting a good deal from your chosen low spread broker.

  • For example, let’s say that you are trading Apple stocks at top-rated broker eToro
  • At the time of writing, the bid price on Apple is $143.14
  • The ask price is $143.42
  • By entering these figures into our calculator, we can see that the spread is just 0.20%

When you consider that eToro is a commission-free broker – this means that our all-in trading fee to access Apple stocks is just 0.20%.

Variable Spread or Fixed Spread?

Once you know how to calculate the spread, you then need to check whether the broker in question offers a ‘variable’ spread or a ‘fixed’ spread.

Variable Spread

In simple terms, a variable spread will change throughout the day. This is in direct coloration to wider market conditions. For example, if you are using a low spread gold broker during busy market hours, then you will benefit from the lowest spreads that the provider can offer. This is because increased trading volume results in higher levels of liquidity and this – lower volatility.

etoro spreads

At the other end of the spectrum, trading your chosen asset outside of standard market hours will result in a much less favorable spread. This is especially the case if you attempt to trade over the weekend – with the exception of cryptocurrencies, which operate on a 24/7 rolling basis.

Fixed Spread

As the name suggests, fixed spreads remain constant at all times. This means that irrespective of wider market conditions, the spread will always remain the same in terms of pips or percentages.

For example, the best low spread brokers might advertise a fixed spread of 1.5 pips on GBP/AUD. Sure, the bid and ask price will still change on a second-by-second basis. But, the gap between the two prices will always stand at 1.5 pips.

Fixed spreads come with both their pros and cons. In terms of the benefits, it’s easy to create an entry and exit strategy as you always know what trading costs are involved.

On the other hand, fixed spreads are usually less competitive than those offered by variable spread brokers. This is because the broker needs to protect itself during times of low liquidity and high volatility.

Be Mindful of ‘Minimum’ Spreads 

Newbie traders are often blinded by the super-competitive spreads offered by an online broker. However, you need to be really careful to assess whether or not the advertised spread contains that all-important word – ‘minimum’.

That is to say, the broker in question might display a headline spread of 0.8 pips on GBP/NZD. However, if you look at the terms and conditions further down on the page, the broker might state that this is the ‘minimum’ spread on offer, and not the status-quo.

As such, the minimum spread might only be achieved when the markets are experiencing high trading volumes. In the case of forex trading, this is usually when during the few hours that both the US and UK markets are open.

Commissions Also Have a Major Say in What you pay in Trading Fees  

This section is of the utmost importance when looking for the best low spread brokers UK of 2021. This is because there are two main fees that come into play when you trade online. That’s spreads and commissions. You already know what the speed is and how it can impact your trading costs. However, you also need to consider what commissions the broker charges, if at all.

eToro low spread broker

Crucially, there is often a trade-off between spreads and commissions.

  • For example, those allowing you to trade on a commission-free basis will build their costs into the spread. In turn, this means that you are likely to get a less favorable spread in comparison to those that do charge commissions.
  • And of course, those that offer super-competitive spreads will often charge a trading commission.

As such, you need to have a firm understand of both the spread and commission payable on your chosen market before opening an account with the broker in question.

We were sure to perform in-depth calculations on the best low spread brokers we reviewed on this page. In doing so, we found that when taking both the spread and commission into account – eToro came out as the best low-cost broker in the UK.

For example:

  • Libertex is a ZERO spread broker. However, the platform charges a commission of up to 0.50%.
  • eToro charges an average spread of 0.20% on stocks, but it allows you to trade commission-free.

As you can see from the above, even at a spread of 0.20%, eToro comes out on top when you factor in the commission-free offering.

Other Important Considerations  

While trading fees, spreads, and commissions are really important when searching for a suitable UK trading site, there are other important considerations to make, too.

As such, make sure you explore the following metrics in your search for the best low spread brokers in the UK.

  • Regulation: It’s crucial that your chosen low spread broker is regulated by a tier-one financial body. eToro is not only regulated by the FCA and covered by the FSCS – but it also holds licenses with bodies in Australia and Cyprus.
  • Tradable Markets: It’s all good and well choosing a broker because it offers low spreads. But, if it doesn’t support your chosen marketplace, it won’t be suitable for your needs. eToro offers everything from stocks and ETFs to forex, cryptocurrencies, and commodities.
  • Payments: Don’t forget that in order to trade online, you will need to make a deposit. The best low spread brokers in the UK will support a range of payment methods. eToro supports debit/credit cards, e-wallets, and bank transfers.
  • Tools and Features: The best low spread brokers in the space offer an assortment of trading tools and features. We really like the Copy Trading tool offered by eToro, which allows you to mirror the buy and sell positions of an experienced investor.
  • Customer Support: The availability of top-notch customer support should not be overlooked in your search for the best low spread brokers UK. In an ideal world, your chosen broker will offer a live chat or telephone support facility that is active 24 hours per day.

As you can see from the key metrics outlined above, choosing the best low spread broker for you and your financial goals can be a time-consuming process.

How to Get Started with a Low Spread Broker

So now that we have explained what you need to do to find a low spread broker that meets your needs, we are now going to walk you through the setup process.

The guidelines below will show you how to get started with this top-rated low spread broker – eToro.

Step 1: Open an Account and Upload ID

Your first port of call will be to visit the official eToro website and begin the account opening process. End-to-end, this should take you no more than 5 minutes.

eToro sign up

67% of retail investor accounts lose money when trading CFDs with this provider.

Much the same as any other regulated brokerage platform, eToro will ask you for the following information:

  • First and Last Name
  • Home Address
  • Date of Birth
  • Mobile Number
  • Email Address
  • National Insurance Number
  • Username and Password

You will also need to verify your mobile number via an SMS that eToro sends you.

Step 2: Confirm Identity

eToro is obliged to verify the identity of all new account holders – as per FCA regulations on anti-money laundering. The good news is that at eToro, you can get your account verified in less than a minute.

All you need to do is upload a clear copy of the following two documents:

  • Valid passport or driver’s license
  • Utility bill or bank account statement (issued within the last 3 months)

If you don’t have access to the above documents right now, eToro will allow you to upload them at a later date. But, if you attempt to make a withdrawal or deposit more than $2,250 in total – you’ll need to get the documents verified before you can proceed.

Step 3: Add Funds to Your Trading Account

Now it’s time to make a deposit. eToro supports a great range of everyday payment methods – most of which are processed instantly (with the exception of a bank transfer).

You choose from the following deposit options:

  • Debit/Credit Card (Visa, MasterCard, Maestro)
  • Paypal
  • Skrill
  • Neteller
  • UK Bank Transfer

Step 4: Find a Low Spread Market to Trade

eToro is home to a huge library of tradable markets. If you already know which asset you wish to buy or sell, enter it into the search box and click on ‘Trade’.

In our example below, we are looking to trade Amazon stocks.

trade at etoro

67% of retail investor accounts lose money when trading CFDs with this provider.

Alternatively, if you click on the ‘Trade Markets’ button on the left-hand side of the screen, you can browse through the many financial instruments supported.

Step 5: Place an Order

Once you have decided which financial instrument you want to trade at eToro, you will need to set up an order.

trade at etoro

This is fairly simple at this low spread broker, as you only need to enter your stake (in US dollars). If you have a bit of trading experience, then you might also decide to deploy limit, stop-loss, and take-profit orders.

Nevertheless, once you are happy with the information entered, click on the ‘Open Trade’ button.

Conclusion

This guide has explained the importance of finding the best low spread brokers for your needs. Crucially, the spread that you pay is an indirect fee collected by the broker, so having an understanding of how competitive the platform is should not be understated.

With that said, spreads are not the only thing that will determine how much you pay to trade at the broker. This is because you also need to take commissions into account – as well as the deposit, inactivity, and conversion fees, too.

All in all, our in-depth research process found that eToro is by far the most competitively-priced low spread broker. Not only in terms of the spreads themselves but the fact that eToro charged no trading commissions on any of its supported marketplaces.

eToro – Best Low Spread Broker UK with 0% Commission

67% of retail investor accounts lose money when trading CFDs with this provider.

 

FAQs

What is the spread when using an online broker?

The spread is simply the difference between the bid (buy) and ask (sell) price that your chosen broker quotes on an asset. The difference between the two prices - which can be calculated in 'pips' or percentages, is how the broker ensures it always makes a profit.

What the best low spread broker in the UK?

We found that eToro is the best low spread broker in the UK. On top of low spreads and zero commissions, this FCA broker offers heaps and markets.

What is the difference between variable spreads and fixed spreads?

If your chosen broker charges a variable spread, this means that the spread will change throughout the day. In most cases, the most competitive spreads will be available when the markets experience higher trading activity. Fixed spreads, on the other hand, remain the same at all times. For example, if the broker offers a fixed spread of 0.9 pips on GBP/USD, then the spread will remain at 0.9 pips irrespective of wider market conditions.

Which brokers offer zero spreads?

One of the only zero spread brokers that we have come across in the online space is that of Libertex. The platform does, however, charge trading commissions.

What is a good spread in forex?

The general consensus is that if you find a broker offering a spread of fewer than 1 pips on major currency pairs, this is deemed competitive. However, once again, you also need to consider whether or not the best low spread forex brokers charge a trading commission.

About Kane Pepi PRO INVESTOR

Kane Pepi is a British researcher and writer that specializes in finance, financial crime, and blockchain technology. Now based in Malta, Kane writes for a number of platforms in the online domain. In particular, Kane is skilled at explaining complex financial subjects in a user-friendly manner. Academically, Kane holds a Bachelor’s Degree in Finance, a Master’s Degree in Financial Crime, and he is currently engaged in a Doctorate Degree researching the money laundering threats of the blockchain economy. Kane is also behind peer-reviewed publications - which includes an in-depth study into the relationship between money laundering and UK bookmakers. You will also find Kane’s material at websites such as MoneyCheck, the Motley Fool, InsideBitcoins, Blockonomi, Learnbonds, and the Malta Association of Compliance Officers.

Questions & Answers (0)

Have a question? Our panel of experts willanswer your queries.Post your question