When the spread is fixed, one of the main factors that influence when establishing the spread is the commercial policy followed by the broker according to Pepperstone broker review (รีวิวโบรกเกอร์ Pepperstone ,which is the term in Thai)

In other words, according to the competition between intermediaries and other marketing factors, each broker establishes the spreads it deems appropriate. The trader can contract with these conditions or not.

When it comes to variable spreads, the broker sets its prices based on those obtained in the market (those provided by its liquidity providers at that precise moment).

In any case, the factors that influence to establish the spread of each of the Forex market currency pairs are the following (whether they are fixed or variable spreads):

• Asset volatility: if volatility is high, the spread increases. It usually happens when economic news publications occur. The more volatile a financial asset, the higher the spread that the broker will charge us.
• The participants in the market: in other words, the liquidity of the asset. If there is a greater number of buyers and sellers it is not difficult to match the orders, and the spread will be lower; The broker will have suppliers in the market at more favorable prices, and this fact is transferred to the trader himself.

Difference Between The Commission And Spread

The commissions also assume the broker’s fees for doing his job. The fundamental difference is how to collect this compensation. A commission is usually charged each time an order is launched to the market; that is, it is charged both when opening and closing a position; in this way, the costs to operate are doubled. It can be of a fixed amount or a percentage on the monetary volume of the operation.

Meanwhile, the spread is usually charged only once and is calculated based on the value of each pip (soon, we will see how to calculate the spread in Forex). In other words, the spread is valued in pips, and it is not an amount or a percentage of the amount to be invested.