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Avatrade Spread
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Avatrade Spread: The Complete Guide

Today, almost all trading brokers stopped charging trading fees and replaced them with spreads, Avatrade being one of those brokers. To find out how the Avatrade spread works, read on.

What is a Spread?

Spreads generally refers to the difference between two yields, rates, or prices. It is also the gap that exists between the ask prices and the bid prices of different assets or securities, such as commodity, bond, or stock. It is called the bid-ask spread.

Now, spread is also the term used to denote differences in trading positions. The gap that exists between short positions (selling) in a futures currency or contract and long positions (buying) in another. It is officially called the spread trade.

Examples of Avatrade Spreads

Avatrade spread depends on your trading instruments and the account type you have with the broker. Given below are further details on the available spread types on Avatrade:

Fixed and variable spread

Typically, most brokers provide both fixed and variable spreads based on the asset or the account type. Avatrade does things a bit differently. Only traders get the fixed spread in Avatrade. Variable spreads are not offered. But then again, a fixed spread at Avatrade is not fixed at all times.

The spread for a specific asset can change when the market conditions get volatile. In fact, they can change multiple times in a day. Since it does not meet the conditions to be called a variable spread, Avatrade uses the term fixed trade.

Avatrade spread is truly fixed for the forex markets. In other markets, a fixed value is used to evaluate the spread. It means the spread can be in a percentage form depending on the market value of the traded instrument.

Spread on account

Avatrade spreads vary based on the account type. But before that, you need to know about the regulators of the platform. Now, the platform is compliant with and regulated by five continents – a commendable feat, without a doubt.

It broadly subdivides accounts into two regions because of the regulatory environment – International and EU. Both subdivisions have a good number of features to get the traders excited.

EU traders have the following account types available to them:

  • Retail Account
  • Options Account
  • Professional Account
  • Spread Betting Account

International traders have the following account types available to them:

  • Options Account
  • Standard Account

The spread remains the same on all EU accounts and International accounts. So, the difference in spreads is not something to think about. Professional accounts tend to get a better spread than the standard accounts.

Spread on instrument

Avatrade spread varies based on the instruments that you trade with. You trade in all kinds of CFDs and forex pairs. So, there are ETFs, forex options, indices, crypto, commodities, and equities. It encompasses a wide range of markets. Therefore, you will always find an Avatrade market for the spread that you are choosing.

Most of these markets tend to have a fixed spread. It applies to every bond market, indices, forex options, and forex pairs. Apart from that, a fixed percentage gets applied to cryptocurrencies and stock CFD markets. There are also fixed mark-ups for all commodity markets.

In some cases, the spread depends on time. For example, the oil and metal spreads are wider from 10 pm to 5 am. But the good news is that Avatrade is a commission-free zone. Also, the spread on forex is pretty low.

Are AvaTrade Spreads too big?

AvaTrade spreads are pretty close to the industry average as they stand at below one pip (i.e., 0.9 pips). However, they are only a bit higher than the spreads found on other entry-level account options. In any case, the difference is not too great to be something to consider. If you are one of the elected professional traders, a spread Avatrade account can be competitive at 0.6 pips.

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