Forex Commission Structures: Spread Only vs Raw Spread
Forex brokers charge either through wider spreads or through a separate commission on raw spreads, and the choice affects total cost.
Forex Commission Structures: Spread Only vs Raw Spread
When you open a forex account, you usually choose between two pricing models: spread-only (standard) or raw spread plus commission (ECN/Pro). Both can be cost-effective — the right choice depends on your trading style, volume, and average trade duration.
The Two Main Account Types
- Spread Only (Standard Account): the broker marks up the interbank spread and charges no separate commission. The spread you see is the spread you pay.
- Raw Spread + Commission (ECN Account): the broker passes through the raw interbank spread — often near zero — and charges a fixed commission per lot traded.
Cost Comparison Example
Assume EUR/USD interbank spread is 0.2 pips.
| Account Type | Spread | Commission (round turn) | Total Cost |
|---|---|---|---|
| Spread only | 1.2 pips | $0 | 1.2 pips |
| Raw + commission | 0.2 pips | $7/lot | 0.9 pips* |
*Assuming EUR/USD where 1 pip ≈ $10 per standard lot, so $7 commission ≈ 0.7 pips.
The raw account is cheaper here — but the gap narrows for pairs with wider interbank spreads.
Which Is Better for You?
Choose Spread-Only If:
- You trade smaller volumes (micro or mini lots)
- You hold positions for hours or days
- You want simplicity — one number to track
- You are a beginner
Commissions can disproportionately affect small trades. A $7 commission on a micro lot represents 70 pips of cost — far more than a slightly wider spread.
Choose Raw + Commission If:
- You trade standard lots or larger
- You scalp or trade very short timeframes
- You place many trades per day
- You want the tightest possible spreads
For high-volume traders, even a 0.3-pip saving per trade adds up over hundreds of trades per month.
How Brokers Quote Commission
Commission is typically charged per side (entry and exit) and expressed per standard lot (100,000 units):
- Common rates: $3–$7 per side per standard lot
- Round-turn cost: $6–$14 per standard lot
- Mini lots usually charged proportionally ($0.30–$0.70 per side)
Hidden Costs to Watch
| Cost | Where It Hides |
|---|---|
| Marked-up spread | Spread-only accounts |
| Wider raw spread | Some ECN brokers pad the raw spread |
| Higher commission | "Zero spread" accounts with $10+ commissions |
| Negative swap | Holding positions against the carry |
| Inactivity fees | Accounts dormant for months |
Calculating True Cost per Trade
True Cost = (Spread in pips × Pip Value) + Commission + Swap
Always compare total cost, not just the headline number. Open two demo accounts — one spread-only, one raw — and trade the same pair for a week to see which suits your volume and style.
Common Beginner Mistakes
- Choosing raw spreads for micro-lot trading (commissions eat the edge)
- Ignoring commission when comparing brokers
- Assuming "zero spread" means "zero cost"
- Overtrading to "save" on commission — volume itself is a cost
Spread-only accounts favor beginners and small-volume traders; raw accounts favor experienced, high-volume traders. Match the model to your trading.