Understanding Broker Commission
Commission is a fixed fee that ECN and raw-spread brokers charge per lot traded. Unlike the spread (which is built into the price), commission is a separate line item on your account statement. It's charged on both entry and exit — known as a round-turn commission.
Commission = Lots × Rate per Lot × Sides
For 1 standard lot with $3.50 commission per side: 1 × $3.50 × 2 = $7.00 round-turn. At 0.1 lots (1 mini): 0.1 × $3.50 × 2 = $0.70 round-turn.
Common Broker Commission Rates
| Broker | Per Lot per Side | Round-Turn (1 lot) |
|---|
| IC Markets | $3.50 | $7.00 |
| Pepperstone | $3.50 | $7.00 |
| FP Markets | $3.00 | $6.00 |
| Vantage | $3.00 | $6.00 |
Commission vs Spread: Total Trading Cost
To get your true cost per trade, add commission to spread cost. An ECN trade on EUR/USD: 0.2 pip raw spread ($2) + $7 commission = $9.00 total. A standard account with 1.2 pip spread and no commission costs $12.00. For 100 trades per month, that's a $300 difference in favor of the ECN account.
Use both calculators together — the spread cost calculator for spread impact and this one for commission — to find your total cost per trade.
Frequently Asked Questions
How is forex commission calculated?
Commission = Lots × Rate per Lot × Number of Sides. An ECN broker charging $3.50 per lot per side on 1 lot round-turn: 1 × $3.50 × 2 = $7.00. The rate is always quoted per standard lot even if you trade smaller positions.
What is the difference between spread and commission?
Spread is the difference between bid and ask prices, paid automatically on every trade. Commission is a separate fixed fee charged by ECN brokers per lot per side. Standard accounts usually have wider spreads but no commission — pick the model that costs less for your trading volume.
How much commission do forex brokers charge?
ECN brokers typically charge $2.50-$7.00 per standard lot per side. IC Markets and Pepperstone: $3.50/side. FP Markets: $3.00/side. Always verify current rates as they change by jurisdiction and account type.
Is it cheaper to trade with commission or spread-only?
Commission accounts are usually cheaper for active traders. Total cost = commission + raw spread. Example: $7 round-turn commission + 0.2 pip spread ($2) = $9 total. A standard account with 1.2 pip spread costs $12 for the same trade.