Avatrade, like every other top forex broker, profit slightly from trades by way of the spreads which they apply.
Spreads are a feature of every Avatrade account types and they are something which you should know more about when opening your Avatrade live account.
That is why we have compiled this Avatrade spread guide.
It should lead you through every step of getting to know the brokers spreads and how they apply to your own trading intention.
You can also see our Avatrade review for a full in depth look at the broker.
Type of Spreads with Avatrade
Avatrade offers spreads that vary depending on the instruments you are trading and what kind of account you open with the broker. Here is a more detailed rundown on the different Avatrade spread types available:
Variable and Fixed Spread
Typically, many brokers will offer both variable and fixed spreads depending upon the asset or your account type. Avatrade go about things in a slightly different manner.
Avatrade does offer a fixed spread only to traders. They do not offer variable spreads. The difference here is where things can get confusing. The Avatrade fixed spread is not always completely fixed.
The spread on a particular asset may change if the market conditions are particularly volatile or indeed during certain time periods through the day. This does not really constitute a truly variable spread either though, so in Avatrades words, they offer a fixed spread only.
Also, when it comes to forex markets, the Avatrade spread is actually fixed, however, when talking about other markets, the spread is actually calculated on a fixed value. This means it can be in percentage form based on the market value of the instrument traded. This means in some markets, the spread becomes wider if the asset value rises, and vice-versa.
The example above can be the case in some instances, however in others, a mark-up can sometimes be applied. This is something which will not take into account the current pricing of the assets.
Spread on instruments
Naturally, the Avatrade spread varies depending upon which instruments you are trading with. This is something which we will take a look at now in greater detail.
First off, it should be noted that you can trade in a wide range of products through Avatrade. This includes on all manner of forex pairs and CFDs in equities, commodities, crypto, indices, forex opions, and ETFs.
This encompasses a vast range of markets, and as such, there is a particular spread available for each Avatrade market of your choosing.
A fixed spread is offered in the majority of these markets usually. This applies to all forex pairs, forex options, indices, and the bonds market. Beyond that, you can expect a fixed percentage to apply in crypto and stock CFD markets and a fixed mark-up to be utilized for most commodities markets.
From time to time you will also find that the spread is somewhat time dependent. This can be illustrated in the case of metals and oil spreads which may be wider between the hours of 10pm-2am, and 10pm-5am respectively.
On the upside for you as a trader, you can look forward to no-commissions on any trades from Avatrade. Everything is commission-free.
Overall, as we will come back to later, the spread on forex trading at Avatrade is very low in comparison to some other brokers. This is even the case with Islamic accounts despite a marginally higher spread here to cover for the free rollovers.
Spread on accounts
As well as instruments, your Avatrade spread may also vary depending on your account type.
Before we discuss account types, let’s take a quick overview of the Avatrade regulators. The broker is regulated and compliant on a total of 5 continents. This is comprehensive even for a top forex broker.
Due to regulatory environments, Avatrade accounts are subdivided into two regions. These are EU, and International. Unlike some other brokers, we can see that Avatrade actually offer more features on the EU side than the international side, possibly due to their Irish HQ.
For EU traders, he account types available are as follows:
- Retail Account
- Professional Account
- Options Account
- Spread Betting Account
The available account options for international traders are as follows:
- Standard Account
- Options Account
In fact, the spread is the same on EU account types as it will be on International account types, so this is something that you don’t need to worry about.
Looking at the more specific types, professional accounts typically have a better spread for you as a trader than the retail or standard account types. On the other hand, trading forex options through the options account type comes with a higher spread than regular forex trading through another account type.
For VIP account holders (VIP level 1 deposit €10,000, VIP level 2 deposit €20,000), a discount on your spread is possible depending on the level of your VIP status.
Finally, an Avatrade Islamic account type is available. This comes with a marginally higher forex spread to cover the absence of rollover fees. No cryptocurrency trading is available on an Avatrade Islamic account either.
Spread review on various assets
Now, let’s take a more detailed look at the spread on each individual asset. Charts are provided so you can see the precise spread in each area which is correct at the time of the last update.
Avatrade facilitates trading in more than 50 forex currency pairs. The spread associated with this trading is comparatively low for the industry and trading is all done on a commission-free basis.
Professional account holders can be eligible to receive further discounts on this spread.
|||Retail/Standard Account||Professional Account|
Forex options trading as previously mentioned, is available at a slightly higher spread and with trading done through the dedicated AvaOptions trading platform. Again, these trades are commission-free.
|||Forex standard Spread||Forex Option Spread|
Commodities at Avatrade are traded as CFDs. These include both hard (mined), and soft (grown) commodities.
Overall, comparative with the industry, the spread is again competitive. Added to that, trading in commodities at Avatrade is also commission-free.
The only point of difference to watch out for here is the possible change in crude oil spread. This can widen between the hours of 10pm-5am (GMT). Cocoa, Coffee, Sugar, and some others also apply a fixed mark-up.
Again here ETFs available through Avatrade are traded as CFDs. There are a total of 5 ETFs available at the moment and these can also be traded on a commission-free basis.
The differing point to remember here is that the ETF spread is calculated on a fixed percentage basis. This percentage is of the market value and so your spread will change depending on the current price of the asset.
|||Typical Fixed Spread|
|MSCI Emerging Markets Index Fund||0.13%|
|S&P 500 VIX Short-Term Futures ETN - Series B||0.13%|
|MSCI Brazil Index Fund||0.13%|
|Energy Select Sector SPDR||0.13%|
|Market Vectors TR Gold Miners||0.13%|
Bonds are again traded as CFDs. There are 2 bonds currently available as listed below. Once again as is always the case with Avatrade, these trades feature no commission.
|||Avg Fixed Spread|
|JAPAN GOVT BOND||0.03|
There are more than 15 assets available in this category, trading the major indices of the world as CFDs. Asia, Europe, and America are all covered when it comes to trading indices with Avatrade. Again you also do not need to worry about commissions here.
|EU Stocks 50||1.00|
A massive selection of shares are available for trading through Avatrade. The spread on these will usually depend on the country as follows:
- USA: Usually 0.13% on most shares
- UK: 0.16%
- Germany: 0.16%
- France: 0.18%
- Italy: 0.19%
Again there are no commissions but remember that the fixed percentage nature of the spread means it will change based on the value of the asset.
|||Typical Fixed Spread|
Avatrade cryptos are traded as CFDs also with no commissions on trades and in fact this market with Avatrade is a very liquid one.
You can trade BTC with USD, EUR, and JPY through Avatrade as well as many other major cryptocurrencies. It is worth remembering, particularly with cryptocurrency trading that it can of course be highly volatile.
This also means that the spreads here can change frequently. It is worth remembering this as the spread is again calculated as a fixed percentage based on the market value of the asset, and is therefore subject to change.
|||Typical Fixed Spread|
Metals are traded as CFDs with Avatrade and again without commission being charged. The range of available metals can be seen below.
Here, as with some of the commodities trading, the metals spread could be slightly wider between 10pm and 2am (GMT). This is a small point to remember if trading during those hours.
The final asset class we will look at are energies. Again these are traded as CFDs with no commissions applied. As with some of the other assets, take care when trading between 10pm and 5am (GMT) as the spread may be wider during these hours.
Energies are also traded with a fixed markup regardless of current value.
Comparison with other major brokers
Having taken a thorough look at all of the spreads applied by Avatrade, let’s take a moment to compare them objectively with other major brokers we have looked at.
Some of the key differences with Avatrade are firstly that both spread betting (EU only) and options trading are available. This is something which traders can’t always access with other brokers and certainly does ass another dimension to your trading potential.
Looking at the spreads, they are highly competitive industry-wide, and all trades are made commission-free. This is something which definitely helps Avatrade remain highly competitive.
Another thing which they apply is a fixed spread in different formats additional to the usual fixed spread in the format of a fixed markup or fixed percentage. Unfortunately, while it still remains good value, it does create a spread system and formulas which can be confusing to some traders.
Overall though, Avatrade compliments its huge range of assets with spreads which are highly competitive, all backed by some of the most comprehensive regulation in the industry all across the world.