Trading costs
Spread, commission and swap: what is the difference?
Separate spread, commission and swap so total trading cost is not reduced to one headline spread number.
You are comparing two Forex accounts. One advertises a tight spread but charges commission separately; the other has a wider spread and no separate commission. The spread number alone cannot tell you which account has the lower total cost.
How the three costs differ
- Spread is the gap between the buy and sell price at a given moment. It can vary by symbol, account type and market conditions.
- Commission is a separate fee based on trade size and the broker’s pricing method, such as a charge per side or for the full round turn.
- Swap is a charge or adjustment that may apply when a position is held through rollover. It depends on the symbol, trade direction and account conditions.
Compare the same trade
For illustration, assume the pip value for one lot in this example is 10 USD. Account A has a 0.8-pip spread and a 7 USD round-turn commission: the estimated cost is 8 + 7 = 15 USD. Account B has a 1.3-pip spread and no separate commission: the estimated cost is 13 USD.
Under these assumptions, Account B costs less for this trade. These are not broker quotes. Confirm pip value, commission method and actual spread for the exact symbol, volume, account and time. If you hold overnight, add swap where applicable.
Make the comparison fair
Use the same basis for each account: same symbol, volume, commission sides and holding period. Then check typical spread during your trading session, whether commission applies per side or round turn, swap for the relevant direction, and currency-conversion charges if your account currency differs.
A trader who usually closes positions the same day may be less affected by swap than someone who holds for several sessions. For a scalper, small differences in spread and commission can recur many times during a day.
Once you know which cost matters to your trading style, select it in Compare Brokers. If Gold is your main market, the XAUUSD broker checklist puts costs alongside contract details and execution conditions.
