Spreads, commissions and the true cost of a trade

Headline numbers like "spreads from 0.0 pips" or "zero commission" describe only part of what a trade costs. To compare accounts fairly, add every charge for the same trade size and the way you actually trade.

The four costs that add up

Spread: the gap between the buy and sell price, paid every time you open a position.

Commission: a fee per lot, usually charged on raw or ECN accounts. It is quoted per side, so a round trip (open and close) costs double.

Swap: overnight financing on positions held past the daily rollover.

Non-trading fees: currency conversion, deposit and withdrawal charges, and inactivity fees.

Worked example: one standard lot of EUR/USD

One standard lot is 100,000 units, so one pip on EUR/USD is worth $10. Here is the cost of one round trip on two typical account types:

The raw account is cheaper here, but the gap depends on the real spreads at the times you trade. Spreads widen around news releases and when the market is quiet, so compare typical or average spreads, not minimums.

Related reading: why spreads differ between currency pairs and the hours when spreads are tightest.