Raw Spread Forex Broker Pricing Infrastructure

What Are Raw Spreads in Forex Trading?

In online forex trading, the bid-ask spread is the primary transaction cost. A "raw spread" refers to the original, unprocessed pricing feed received directly from the interbank market or liquidity providers, without any additional markup or spread padding from the broker. While standard retail brokers add a markup to the spread to generate profit (e.g., taking an interbank feed of 0.2 pips and displaying it as 1.5 pips to the retail client), a raw spread broker passes the feed directly to the client's trading screen. At Avora Markets, our PRO and ECN account models provide true raw feeds, allowing you to buy and sell at the exact market rate.

The Mechanics of Spread Markups vs Interbank Pricing

To understand the difference, let's look at how price feeds travel from the global interbank network to your screen:

• Standard Broker Model: Interbank Price (0.1 pips) + Broker Markup (1.2 pips) = Client Price (1.3 pips). The broker keeps the 1.2 pips markup as profit.
• Raw Spread Broker Model: Interbank Price (0.1 pips) = Client Price (0.1 pips). The broker passes the raw rate and charges a separate, flat commission fee (e.g., $2.0 per side per lot).

For active day traders, scalpers, and automated trading algorithms, the raw spread model is highly advantageous because it reduces transaction drag, allows for more precise technical entries, and simplifies cost accounting.

How Raw Spreads Maximize Algorithmic Trading Performance

Algorithmic trading systems and Expert Advisors (EAs) rely on precise mathematical models to enter and exit the market. Many of these algorithms, particularly scalping robots, target small profit targets of 3 to 10 pips. In a standard markup environment, a wide spread makes these strategies unviable because the market has to move much further just for the trade to break even. By utilizing raw spreads starting at 0.0 pips on Avora Markets' ECN servers, EAs can hit their profit targets faster, resulting in higher win rates and lower drawdown ratios.

Liquidity Pools and Spread Tightness

The tightness of a raw spread is determined by the size and quality of the broker's liquidity pool. If a broker only connects to one or two banks, their spreads will be wider and more volatile. Avora Markets aggregates price quotes from over 15 prime brokers, major commercial banks, and institutional market makers. This deep liquidity network creates competitive pricing, keeping spreads extremely narrow even during high-impact news releases or off-peak trading sessions.

Calculating Your True Cost of Trading

To maximize profitability, you must calculate the true cost of your trades. The formula is: Total Cost = (Spread in Pips × Pip Value) + Commission. On a raw ECN account at Avora Markets, trading 1 lot of EUR/USD (pip value is $10) with an average spread of 0.1 pips and a $4.00 round-turn commission costs just $5.00. On a standard markup account, a 1.5 pip spread with no commission costs $15.00. By switching to a raw spread account, you instantly save $10.00 per trade, directly increasing your bottom line.

The Zero Spread Revolution with Avora Markets

Avora Markets is committed to delivering the ultimate trading environment. By providing raw spreads starting at 0.0 pips, co-locating our execution servers in Equinix NY4 and LD5 hubs, and offering a low commission of $2.00 per side, we give retail traders access to the same tools and conditions as institutional firms. Start trading with a true raw spread broker today.