Foreign exchange spread selection: fixed or floating, which is better?

Floating spreads better reflect real market conditions, as quotes in the interbank market are always changing dynamically. Financial Institution Groups set bid and ask prices according to their own needs, and spreads naturally fluctuate. likeAohuiThis type of platform that emphasizes transparency uses a floating spread model to help traders make decisions closer to the actual market.

Platforms with fixed spreads often require human intervention to maintain the same price, which in most cases may incur hidden costs for traders and is unfair.

For example, if a platform has a fixed EUR/USD spread of 2 pips, but the daily actual spread is only 1 to 1.2 pips, then the trader pays about 0.8 pips more per trade. Over time, this extra expenditure is considerable, and the platform benefits from it.

On the eve of major economic data, the EUR/USD spread can quickly widen to 5-6 pips. If the platform insists on maintaining a fixed 2 pip spread, it will either bear the difference itself or re-quote the trader. In practice, re-quotes are more common because the platform is unwilling to take additional losses. Therefore, choosing a floating spread can help traders respond more flexibly to market fluctuations.