Every forex trade has a cost, even when a broker advertises “zero commission”. The three main costs are the spread, the commission and the swap. Knowing how each one works lets you compare brokers on what you really pay, not on the headline in an advert.
What is the spread in forex?
Every currency pair has two prices. The bid is the price at which you can sell; the ask is the price at which you can buy. The spread is the difference between them, and it is the broker’s main charge on standard accounts.
You pay the spread the moment you open a trade, which is why a new position starts slightly in the red. In money, the cost is spread in pips × pip value × lots. On EUR/USD a 1.0-pip spread costs about $1 on 0.10 lot and about $10 on 1 lot. If pips are new to you, read what pips, lots and leverage are.
Why spreads change
- Liquidity: major pairs such as EUR/USD usually have the tightest spreads; exotic pairs are much wider.
- Time of day: spreads often widen around the daily rollover and when the main markets are closed.
- News: around big releases spreads can widen sharply for a few minutes.
- “From” values: most accounts have variable spreads, so “from 0.0 pips” describes the best moments, not the average.
Commission: raw-spread and ECN accounts
Raw-spread accounts (also called ECN, Zero or Pro) show spreads close to zero but charge a commission per lot, quoted either per side (opening and closing are charged separately) or per round turn. A typical example is $3.50 per side, or $7 per lot round turn.
| Example per 1 lot of EUR/USD | Standard account | Raw-spread account |
|---|---|---|
| Spread | 1.2 pips = $12 | 0.1 pip = $1 |
| Commission | $0 | $7 round turn |
| Total cost | $12 | $8 |
These numbers are an example, not a specific broker’s prices. The point is to compare the total cost per lot, not the headline spread. Raw-spread accounts usually win for frequent traders such as scalpers; see our guide to scalping.
Swap: the overnight fee
If you keep a position open past the daily rollover (often 5 pm New York time), the broker charges or pays a swap. It reflects the interest-rate difference between the two currencies plus the broker’s markup, so it is usually negative and occasionally positive. Many brokers charge three days of swap on one night of the week, often Wednesday, to cover the weekend.
Swaps hardly matter to day traders who close everything before the rollover, but they add up for swing traders who hold positions for days or weeks. Some brokers offer swap-free (Islamic) accounts, usually with other fees instead. You can find the swap rates in the platform’s symbol specification.
Other costs to check
- Deposit and withdrawal fees, including those charged by your bank or e-wallet.
- Currency conversion if you fund the account in a different currency.
- Inactivity fees after months without trading.
- Slippage: the difference between the price you clicked and the price you got, mostly in fast markets.
How to compare brokers on cost
- Compare the same pair and account type, for example EUR/USD on the account you would really open.
- Add spread and commission per lot to get the total; use typical spreads, not “from” values.
- Check the swap if you hold trades overnight.
- Check deposit and withdrawal costs for your country.
- Remember that cost comes after safety: a cheap broker without a strong licence is not cheap. See our guide to regulated brokers and our broker comparison.
On a cent account the costs are the same per unit but tiny in money, which makes it a cheap place to learn how spreads behave. For the costs of trading many times a day, see our day trading guide.
Frequently asked questions
What is a good spread on EUR/USD?
On standard accounts at regulated brokers, spreads of around 1 pip in normal market hours are common; raw-spread accounts are often close to 0.0–0.3 pips plus a commission. Always check the broker’s live typical spreads.
Is a zero-commission account really free?
No. The cost is built into a wider spread. Compare the total cost per lot.
Why did my spread widen at night?
Around the daily rollover liquidity is thin and many brokers widen spreads for a short time. Avoid opening trades in that window if you can.
Forex and CFD trading on margin is high-risk and most retail traders lose money. Nothing in this guide is financial advice.
To see how cashback changes these costs, try the free forex rebate calculator on our sister site JFRebate and enter your own spread and volume.