Why do prices and spreads differ between brokers?

Short answer

Prices and spreads can differ between brokers because they use different liquidity sources, pricing models, and execution conditions. These differences are normal and reflect how real market pricing works.

There is no single market price

Financial markets do not have one fixed, universal price.

Instead:

1. prices come from multiple liquidity providers,
2. each provider streams its own Bid and Ask,
3. brokers aggregate and deliver these prices to clients.

This is why small price differences exist across platforms.

Different liquidity providers

Where prices come from

Brokers receive prices from:

1. banks,
2. prime brokers,
3. liquidity pools,
4. market makers.

Each source may:

1. quote slightly different prices,
2. have different spreads,
3. update prices at different speeds.

A broker’s final price depends on which providers are connected.

Different spread models

Raw vs markup spreads

Some brokers:

1. offer raw spreads and charge commission,
2. add a markup to the spread instead of commission,
3. use a combination depending on account type.

This affects the visible spread even when market conditions are the same.

Execution and risk management

Execution rules

Brokers may differ in:

1. execution speed,
2. slippage handling,
3. order routing logic,
4. internal risk controls.

These factors influence the final execution price and spread behavior.

Market conditions and timing

Spreads can widen or narrow depending on:

1. volatility,
2. liquidity,
3. time of day,
4. news events,
5. holidays or session overlaps.

Different brokers may react to these conditions at different speeds.

The illustration shows how brokers form prices from different liquidity streams.

Why this does not mean one broker is “wrong”

Small price and spread differences are normal.

They do not automatically mean:

1. price manipulation,
2. incorrect pricing,
3. unfair trading conditions.

They reflect how decentralized markets operate.

Why this matters for traders

Understanding pricing differences helps traders:

1. avoid false assumptions,
2. choose suitable account types,
3. understand execution behavior,
4. compare trading conditions realistically.

Price comparison only makes sense when execution quality and costs are considered together.

What this completes

This article completes the How Trading Works section by explaining:

1. execution mechanics
2. pricing behavior
3. trading costs
4. risk controls

Together, these articles form a practical reference for understanding real trading conditions.