What is a forex trading commission?
Commission is a transaction fee some brokers charge separately from their bid–ask spread. Raw and certain zero-spread account types commonly use this pricing structure, while a standard account may embed much of the transaction charge in a wider spread. Neither method is automatically cheaper.
The most useful question is not whether an account has a commission, but what the total round-trip trading cost looks like on the instrument, lot size and session you actually trade. That means evaluating both the execution spread and the stated commission.
Per-side commission versus round-turn commission
A per-side fee applies once on entry and again on exit. A round-turn fee describes the combined amount for both sides of the same-sized trade. A broker may debit both sides separately or charge the full amount when the position opens; the presentation method does not change the arithmetic.
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Educational example only, not a live broker quotation.
Some platforms quote commissions by notional value or by units rather than by lots. Products such as metals, index CFDs and crypto CFDs may have entirely different rules, so it is unsafe to apply an EUR/USD commission rate across every symbol.
How commission scales with position size
Assume a hypothetical broker charges $3.50 per standard lot per side, with a standard lot defined as 100,000 base-currency units. Opening and closing a 0.1-lot position would cost $0.35 on each side, or $0.70 altogether. A 0.5-lot position would cost $3.50 round turn, while 1.0 lot would cost $7.
| Trade size | Entry commission | Exit commission | Round turn |
|---|---|---|---|
| 0.10 lot | $0.35 | $0.35 | $0.70 |
| 0.50 lot | $1.75 | $1.75 | $3.50 |
| 1.00 lot | $3.50 | $3.50 | $7.00 |
Real broker terms may introduce minimum ticket charges, tiered pricing, differences between platforms or conversion from the commission currency into the account currency. Always check these details before using a simplified per-lot formula.
Commission and spread together: a fair comparison
Take a one-lot EUR/USD trade in a hypothetical USD account. Suppose Account A has a 0.2-pip quoted spread and charges $7 round turn per lot. Using about $10 per pip, the estimated spread cost is $2, so total entry-and-exit friction is $9 before slippage or financing. Account B has no separate commission but a 1.0-pip spread, for an estimated $10 under the same assumptions.
Account A appears cheaper in this specific scenario, but the result could reverse if spreads widen, the commission differs on the selected instrument, or holding charges change. Neither quote establishes that one broker will always deliver the better execution price.
Five checks before choosing a raw-spread account
- Confirm whether the advertised commission is per side or round turn.
- Check what a standard lot represents for your instrument.
- Read the commission denomination: USD, EUR, base currency or account currency.
- Include average spread information, not solely a minimum spread claim.
- Verify whether the platform, region or account tier changes the pricing.
For a broader explanation, see Forex Trading Costs Explained and the article Standard vs Raw Spread Forex Accounts. You can then use the True Trading Cost Calculator to test the same lot size and trade frequency across supported broker account families.
What about frequent scalping?
Commission becomes particularly visible when a trading strategy generates many round trips. Forty trades at $7 per one-lot round turn represent $280 of commission before spread costs. Reducing the lot size reduces proportional commission in this simple model, but it also changes market exposure; never size positions solely to minimise fees.
The UK’s Financial Conduct Authority has explicitly noted that bid–offer spreads, commissions and overnight funding charges all contribute to CFD value, and that focusing only on spreads can omit material costs. Read its multi-firm review of CFD pricing for the regulatory context.
Frequently Asked Questions
Is $3.50 per side the same as $7 round turn?
Yes, for one standard lot if the rate applies identically on opening and closing and there are no additional minimum charges or currency conversions.
Does zero commission mean zero trading cost?
No. A zero-commission account can recover transaction cost through the bid–ask spread, with potential overnight and other fees in addition.
Can brokers charge commission on gold differently from forex?
Yes. Each instrument and platform may have separate contract specifications and commission rules; do not assume currency-pair rates apply to gold CFDs.
Risk and methodology note: All figures in this article are illustrative calculations, not observed broker quotes or promises of execution. Retail forex and CFDs carry substantial risk. Verify instrument specifications, fees and eligibility with the regulated entity serving your country.