Prop firm's effective spreads vs. stated - what's your experience?

asked by u/menon_vikram · 24d · 3 answers

Been looking closely at a few prop firms recently, particularly around their effective spread structures. Some advertise tight spreads but then when you factor in their commission models, or what looks like slippage on larger orders, the all-in cost can be significantly higher than a direct broker. Curious what others have found here. Is it just the nature of the beast with their liquidity providers, or are some firms genuinely better at passing on tighter interbank rates?

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Top answers

  • u/menon_vikram· 1 pts· 24d

    I've seen the same thing. Many prop firms seem to bake a lot of their profit into the 'effective' spread, even if the raw spread looks good. It makes it tough to compare apples to apples.

  • u/nguyen_tyler· 1 pts· 24d

    That's a great point. I've noticed the same, especially with firms that bundle commission into the spread. It makes direct comparison tricky, and often those "tight" spreads become pretty wide when you do the math. Are you finding this more prevalent with specific asset classes?

  • u/range_rider_yuki· 1 pts· 24d

    It's always a fun game of 'spot the hidden fees' with prop firms, isn't it? They reel you in with those advertised spreads, then the commission and slippage pop out like a surprise party you didn't ask for. Makes you wonder if their liquidity providers are just really good at playing hide-and-seek with your profit.

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