Why Is Exness Spread So High?
When trading forex with Exness, one of the most frequently asked questions by traders is, "Why is Exness spread so high?" Spreads play a critical role in determining trading costs, and understanding why they can appear high is essential for both novice and experienced traders. In this comprehensive guide, we’ll explore the factors that influence Exness spreads, how they compare to industry standards, and actionable tips to manage trading costs effectively. Whether you’re scalping, day trading, or holding long-term positions, this article will provide clarity on Exness spreads and why they vary.
What Are Spreads in Forex Trading?
Before diving into why Exness spreads might seem high, let’s clarify what a spread is. In forex trading, the spread is the difference between the bid price (the price at which you can sell a currency pair) and the ask price (the price at which you can buy it). Measured in pips, the spread represents the cost of entering a trade and is a primary way brokers like Exness generate revenue.
For example, if the EUR/USD pair has a bid price of 1.1000 and an ask price of 1.1002, the spread is 2 pips. A narrower spread means lower trading costs, while a wider spread increases the cost, particularly for high-frequency traders like scalpers. Understanding the factors that cause spreads to widen is key to answering why Exness spreads may appear high at times.
Why Do Exness Spreads Vary?
Exness, a globally recognized forex broker regulated by authorities like the FCA, CySEC, and FSCA, offers a range of account types with varying spread structures. While Exness is known for competitive spreads, certain conditions can lead to wider spreads. Below are the primary reasons why Exness spreads may seem high:
1. Market Volatility
Market volatility is one of the biggest drivers of spread fluctuations. During periods of high volatility, such as major economic news releases (e.g., U.S. Non-Farm Payrolls or central bank announcements), spreads tend to widen across all brokers, including Exness. This is because volatility increases risk for brokers, prompting them to adjust spreads to protect against sudden price movements.
For instance, when trading exotic currency pairs or during market opening/closing hours, volatility can spike, leading to wider spreads. Exness operates with floating spreads on most accounts, meaning spreads adjust dynamically based on market conditions. During calm markets, spreads may be tight, but they can widen significantly during volatile periods.
2. Liquidity Levels
Liquidity refers to how easily an asset can be bought or sold without affecting its price. Major currency pairs like EUR/USD or USD/JPY typically have high liquidity, resulting in tighter spreads. However, exotic pairs (e.g., USD/TRY or USD/ZAR) or less-traded instruments often have lower liquidity, leading to wider spreads.
Exness, as a hybrid broker combining market maker and ECN models, may widen spreads during low-liquidity periods, such as overnight sessions or during holidays when fewer market participants are active. This is a common practice across the industry, not unique to Exness.
3. Account Type
Exness offers multiple account types, including Standard, Standard Cent, Pro, Raw Spread, and Zero accounts, each with different spread structures. For example:
Standard and Standard Cent accounts offer commission-free trading but typically have higher spreads, starting from 0.3 pips.
Raw Spread and Zero accounts feature spreads starting from 0.0 pips but charge a commission per lot, which may offset the lower spread cost.
Pro accounts are designed for advanced traders and offer a balance of low spreads and no commissions.
If you’re trading on a Standard account and notice higher spreads, it could be due to the account type’s structure, which prioritizes commission-free trading over ultra-tight spreads.
4. Instrument Type
The type of trading instrument also impacts spreads. Major currency pairs generally have tighter spreads due to high trading volume, while exotic pairs, commodities (like gold or oil), or indices may have wider spreads. For example, Exness offers some of the lowest spreads on gold (XAUUSD) and oil (USOIL), but these can still widen during volatile market conditions.
5. Broker’s Pricing Model
Exness operates a hybrid model combining market maker and ECN features. As a market maker, Exness provides liquidity by quoting bid and ask prices, profiting from the spread. During high-risk periods, such as low liquidity or high volatility, spreads may widen to manage the broker’s exposure. In contrast, ECN brokers match orders directly, often offering tighter spreads but charging commissions. Exness’s hybrid approach aims to balance competitive spreads with reliable execution.
Are Exness Spreads Really High?
While some traders perceive Exness spreads as high, data suggests they are competitive compared to industry standards. For instance:
On Standard accounts, the EUR/USD spread averages 1.0 pip during liquid market hours, beating the industry average of 1.08 pips.
Raw Spread and Zero accounts offer spreads as low as 0.0 pips with a fixed commission, ideal for scalpers and high-frequency traders.
Exness’s proprietary pricing algorithms ensure tight and stable spreads for assets like BTC, XAUUSD, and USOIL, even during volatile periods.
However, spreads on Standard accounts may appear higher compared to professional accounts like Raw Spread or Zero, especially for exotic pairs or during volatile market conditions. This perception of "high" spreads often stems from comparing different account types or trading conditions without considering the underlying factors.
How to Manage High Spreads on Exness
While spreads are influenced by market conditions and broker policies, traders can take steps to minimize their impact on trading costs:
1. Choose the Right Account Type
If low spreads are a priority, consider switching to a Raw Spread or Zero account. These accounts offer ultra-low spreads (starting from 0.0 pips) with a predictable commission, making them ideal for scalping or high-volume trading. However, they require a higher minimum deposit ($200–$500).
2. Trade During High-Liquidity Hours
Spreads are generally tighter during peak trading hours, such as the overlap of the London and New York sessions. Avoid trading during low-liquidity periods, like overnight or during holidays, to minimize spread costs.
3. Monitor Economic Events
Use Exness’s Economic Calendar to stay informed about high-impact news events that could trigger volatility and wider spreads. Planning trades around these events can help you avoid unexpected costs.
4. Leverage EXD (Exness Dollars)
Exness offers EXD, a reward currency tied to its Premier Program, which provides cashback on spreads and commissions. By earning EXD through consistent trading volume, you can reduce trading costs by up to 50%. For example, on a Raw Spread account, EXD can lower the $7 commission per lot to $3.50.
5. Use Demo Accounts to Test Strategies
Exness provides demo accounts with unlimited virtual funds, allowing you to test strategies and monitor real-time spreads without risking capital. This can help you understand how spreads behave under different market conditions.
Exness vs Competitors: How Do Spreads Compare?
To determine whether Exness spreads are truly high, let’s compare them with another popular broker, XM:
Exness Standard Account: EUR/USD spread averages 1.0 pip, commission-free.
XM Standard Account: EUR/USD spread averages 1.2–1.4 pips, also commission-free.
Exness Raw Spread/Zero Accounts: Spreads from 0.0 pips with a $3.50 commission per lot.
XM Zero Account: Spreads from 0.0 pips with a $3.50 commission per lot.
Exness generally offers tighter spreads on Standard accounts and comparable conditions on professional accounts. Additionally, Exness’s lack of withdrawal fees and swap-free trading for most instruments (e.g., forex majors, crypto, and gold) adds to its cost-effectiveness.
Why Choose Exness Despite Perceived High Spreads?
Despite occasional concerns about spread levels, Exness remains a top choice for traders due to:
Regulation: Licensed by trusted authorities like FCA, CySEC, and FSCA, ensuring transparency and safety.
Fast Execution: 98% of pending orders are executed slippage-free, thanks to strategically located servers.
Flexible Leverage: Up to 1:2000 (or unlimited in some regions), allowing traders to maximize positions.
No Withdrawal Fees: Unlike some brokers, Exness does not charge for deposits or withdrawals.
Educational Resources: Exness provides blogs, market analysis, and Trading Central insights to help traders navigate market conditions.
Conclusion
The perception that Exness spreads are high often stems from factors like market volatility, low liquidity, account type, or trading exotic instruments. However, Exness offers competitive spreads, particularly on professional accounts like Raw Spread and Zero, which start from 0.0 pips. By choosing the right account type, trading during high-liquidity hours, and leveraging tools like EXD, traders can effectively manage costs. Exness’s transparency, regulation, and robust trading platform make it a strong choice for forex traders, even when spreads occasionally widen.
For traders looking to optimize their experience, explore Exness’s account options, monitor market conditions, and take advantage of demo accounts to refine strategies. By understanding the factors behind spread fluctuations, you can trade smarter and maximize profitability.
