Spread Cost Calculator
Calculate your trading spread costs and understand the true cost of each trade.
Trade Details
⚡ Results update automatically as you type
Spread Cost Results
Spread is charged once when you enter (built into price)
Based on current settings per trade
Understanding Spread Costs
What is Spread?
The spread is the difference between the bid (sell) and ask (buy) price. It's how brokers make money and is your cost to enter a trade.
Fixed vs Variable
Fixed spreads stay constant, while variable spreads widen during news events and low liquidity. ECN brokers typically offer variable spreads.
Why It Matters
Spread costs add up quickly, especially for active traders. A 1 pip difference can cost thousands annually. Compare brokers to minimize costs.
📊 Typical Spreads by Pair Type
| Pair Type | Typical Spread | Cost per Lot | Examples |
|---|---|---|---|
| Major Pairs | 0.5 - 1.5 pips | $5 - $15 | EUR/USD, GBP/USD, USD/JPY |
| Minor Pairs | 1.5 - 3.0 pips | $15 - $30 | EUR/GBP, EUR/JPY, GBP/JPY |
| Exotic Pairs | 3.0 - 10+ pips | $30 - $100+ | USD/TRY, EUR/ZAR, GBP/NZD |
📐 Spread Cost Formula
Spread Cost = Spread (pips) × Pip Value × Lot Size Pip Value for EUR/USD = $10 per pip
Spread Cost = 1.5 × $10 × 1 = $15 per trade
Frequently Asked Questions
What is spread in forex trading?
The spread is the difference between the bid (sell) and ask (buy) price of a currency pair. It's how brokers make money and represents your cost to enter a trade. Our spread cost calculator helps you understand these costs before trading.
How do I calculate spread cost?
Spread cost = Spread (in pips) × Pip Value × Lot Size. For EUR/USD with 1.5 pip spread and 1 standard lot: 1.5 × $10 × 1 = $15 per trade. Our spread cost calculator computes this automatically for any currency pair and lot size.
Is spread charged on entry and exit?
Spread is effectively charged once when you enter a trade. It's built into the price - you buy at the higher ask price and sell at the lower bid price. So your position starts at a small loss equal to the spread amount.
Why do forex spreads widen during news events?
During high-impact news, liquidity drops as market makers reduce their exposure to risk. With fewer orders in the market, spreads naturally widen. This is most common during NFP, FOMC, central bank decisions, and other major economic releases.
What's the difference between fixed and variable spreads?
Fixed spreads stay constant regardless of market conditions. Variable (floating) spreads change based on liquidity and volatility - tight during normal conditions, wider during news. ECN brokers typically offer variable spreads.
How do ECN/RAW spread accounts work?
ECN/RAW spread accounts offer near-zero spreads (0.0-0.3 pips) but charge a separate commission per trade. Total cost = spread + commission. Often cheaper for active traders despite the commission. Our spread cost calculator can help compare total costs.
How much should I pay in forex spreads?
For major pairs (EUR/USD, GBP/USD), competitive brokers offer 0.5-1.5 pips or $5-15 per standard lot. If you're paying more than 2 pips on majors, consider switching brokers. Active traders should prioritize low spreads.
Does spread affect my stop loss and take profit?
Yes. For buy orders, your stop loss and take profit are triggered by the bid price. For sell orders, they're triggered by the ask price. Always account for spread when setting tight stops to avoid premature triggers.
How do spread costs add up over time?
Spread costs compound quickly for active traders. Trading 10 times daily with $10 spread costs = $100/day = $2,000/month = $24,000/year. Use our spread cost calculator to project your annual trading costs and find ways to reduce them.
How can I reduce my spread costs?
Reduce spread costs by: 1) Choosing brokers with competitive spreads, 2) Trading during high-liquidity sessions (London/NY overlap), 3) Avoiding trading during major news, 4) Using ECN accounts for high-volume trading, 5) Trading major pairs with tighter spreads.