Spread groups and why two clients at one broker see different prices

[Fairman]

Spread groups and why two clients at one broker see different prices

Two traders at the same broker, same account type, same pair, same second. Their spreads aren't always identical. Brokers often place clients into spread or pricing groups behind the scenes, and the group decides what markup is added to the raw price.

The reasons vary. Some brokers price by account size or monthly volume, giving tighter spreads to larger clients. Some have separate groups for clients who came through an introducing broker, because the IB's rebate is built into a wider spread. Some move clients between groups based on their trading style, especially very short holding times that are hard for the broker to manage.

For most retail traders this is invisible. You see one spread on your platform and assume everyone sees the same.

It becomes visible when you compare notes with someone at the same broker and your typical spreads don't match, or when your own spreads seem to change after a period of active trading with no change to your account type.

If you suspect it, ask support directly which pricing group your account is in and whether it can change. Some brokers will tell you. Others will say spreads are variable and leave it there. Either answer is useful information.

It's also a reason not to rely completely on spread comparisons posted online. The numbers someone else sees may be from a different group than the one you'd be placed in.

[Fairman]

Signing up through an affiliate or IB link is one of the most common reasons for a wider group. The broker has to pay the IB something per lot, and that money usually comes from a markup on your spread or commission. If you joined through a link and later found that a direct account had tighter pricing, the gap is often roughly the size of the IB payment. Some traders ask the broker to move them out of the IB group, which some brokers will do and some won't, depending on the agreement with the introducer. Ask the broker directly and get the answer in writing either way.

[Fairman]

It's not always a negative. Some brokers have a group for high volume traders with tighter spreads or lower commission, and moving into it can be a matter of asking once you reach a certain monthly volume. Brokers rarely advertise these tiers widely. Asking support what volume would qualify for better pricing is a simple question that a lot of active scalpers never think to ask, even though their monthly lot count might already be close to the threshold. The question costs nothing, and the worst answer is no. Some brokers also offer lower commission rather than tighter spreads at higher tiers, which works out much the same for a scalper. Ask which form the discount takes before assuming it's spread.

[Fairman]

For traders running EAs across multiple accounts at the same broker, spread groups can explain why the same strategy produces slightly different fills on each account. If one account was opened at a different time or through a different channel, it may be in a different group. Logging the spread at each trade on every account, side by side, makes the difference obvious. Without that log, it's easy to blame the EA logic for what is really a pricing difference. A spread column per account in the trade log is all that's needed, and the pattern usually shows within a week. The other common cause is a different server. Two accounts at one broker can be on different trade servers, especially if one was opened years ago, and different servers sometimes have different pricing and execution. The server name is shown in the platform login, so it's quick to check.

[FXS London Scalper]

Spread groups explain a lot of the confusion in broker comparisons. One thing to try is comparing the spread you see at the London open with what the broker advertises. If yours is consistently higher, it can be worth asking which pricing group the account is in. Some brokers will move you to a better group based on volume if you ask. Also worth noting the account type at registration, since some groups are tied to the account and not changeable later.

[Fairman]

Regulation affects this as well. Brokers that run several entities under different regulators often price clients in each entity separately. An account opened under one regulator can have different spreads from an account at the same brand under another. When reading broker reviews, check which entity the reviewer used, because the pricing, leverage and protections can all be different even though the platform and the brand name look the same. Reviews rarely mention this, but the entity can change everything from spreads to negative balance protection, so look for it in the account opening documents before comparing anything else.