Do spreads change even though your position is open and running? Or does it remain the same untill you have closed your position?
That is a good question, and I have not read anything anywhere about it. Let’s look at this logically. The spread of a broker changes according to market volatility. So when you enter the trade, you are going to be subject to the spread that represents the volatility of that trade pair when you enter.
Now if you were a broker, would you want to “lock” the spread for when the punter decides to exit the trade? What happens if he exits the trade over the non-trading weekend? If you lock the spread some customers will complain you are gouging profits, whilst those that gain will always keep their mouth shut (human nature). Damned if you do, damned if you don’t. So brokers should and probably do pass on as much risk as they can to their customers - that is the nature of their business. And if they can’t pass on that risk of market spread, then they will inevitably make up for it another way - like charging a commission. And it would be a very high commission once they experience gapping.
From a logical perspective, the answer has to be YES, all the time.
Anyone agree / disagree?
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The spread might normally be one to five pips between the two prices. However, the spread can vary and change at a moment’s notice given market conditions. Investors need to monitor a broker’s spread since any speculative trade needs to cover or earn enough to cover the spread and any fees.
Yes, it is normal for spreads to go up and down at times which is why traders choose broker with spreads starting lower at 0.0pips.
I trade with FP Markets an ASIC broker that offers 0.0pips because it is suitable for scalping.
What is their commission per trade, if you don’t mind me asking?
Yeap, that depends on the broker, but it is bound to go up and down.