How forex commission is actually calculated

Commission is the charge separated out from the spread, found on ECN and Raw accounts. It looks
simple, but brokers quote it in two different ways — different enough to make people compare
backwards.

1. Two ways of quoting, one number

The same charge can be written either way:

• Per side — “$3 per lot per side”: $3 to open, $3 to close.
• Round turn — “$6 per lot”, opening and closing already combined.

Those are the same cost. Compare broker A’s “$3” with broker B’s “$6” without
reading carefully and you reach exactly the wrong conclusion.

2. What the market charges

On an ECN account the usual range is $4.50–7 round turn per standard lot. Below
that band usually comes with a wider spread; above it needs a clear reason.

3. The total-cost formula

Cost per lot = (spread in pips ×
pip value) + round-turn commission

Take EUR/USD at a 0.2-pip spread with $6
commission:

• Spread: 0.2 × $10 = $2
• Commission: $6
• Total: $8 per lot

Against a Standard account at 1.2 pips with no commission: 1.2 × 10 = $12. A $4
difference per lot.

4. Commission scales with size, not with position value

This one is widely misread. Commission is charged per lot, regardless of the
leverage you used or the margin behind it. One lot at
1:30 and one lot at 1:500 pay identical commission.

5. Commission on instruments other than currency pairs

Gold, indices and share CFDs usually carry their own commission schedule, sometimes as a
percentage of contract value rather than a fixed figure per lot. Read the
contract specification rather than assuming it
works like a currency pair.

6. Why commission matters for rebates

Most rebate schemes are calculated on traded volume — which is to say, per lot. Which means
whoever pays the most commission also earns the biggest rebate — and once you work
in net cost, the ranking between account types can reverse.

The correct calculation: net cost = spread + commission − rebate, on the number of lots you
actually trade in a month.

This article is for information only and is not investment advice. Conditions and fee levels are published by the brokers and can change at any time — check with the broker you actually use. Leveraged forex and CFD trading carries a high level of risk and can cost you your entire deposit.