Spread Cost Calculator

What Is Spread Cost?

Every forex trade has two prices: the bid (what buyers are willing to pay) and the ask (what sellers are asking). The difference between them is the spread, and it represents your cost to enter a trade. Unlike commission, the spread cost is deducted from your position automatically — you start every trade slightly in the red.

For example, if EUR/USD is quoted at 1.1050/1.1052, the spread is 2 pips. Buying at 1.1052 means the price must rise to 1.1054 just to break even.

With a 1.2 pip spread on 1 standard lot of EUR/USD: 1.2 × $10.00 × 1 = $12.00 per trade. Opening and closing the position costs $24.00 round-turn.

Typical Spreads by Pair Type

How Spread Affects Trading Strategy

The spread directly impacts profitability, especially for short-term traders. A scalper taking 10 trades per day on EUR/USD with a 1-pip spread pays $100/day in spread costs on 1 lot. Over 20 trading days, that's $2,000 — all before any profit or loss from price movement.

For swing traders holding positions for days or weeks, the spread is negligible relative to the price move. But for day traders and scalpers, choosing pairs with tight spreads can save thousands per year. Use the commission calculator to add broker commissions to your total trading cost.

Spread vs Commission: Which Broker Model Costs Less?

Standard accounts have wider spreads but no commission. Raw/ECN accounts have tight spreads (often 0.0–0.3 pips) but charge a commission per lot. A typical ECN commission is $3.50 per side ($7.00 round-turn). On EUR/USD with 0.2 pip spread: spread cost = $2.00 + commission $7.00 = $9.00 total. A standard account with 1.2 pip spread: $12.00 with no commission. In this scenario, the ECN account saves $3.00 per round-turn.

Frequently Asked Questions

What is spread cost in forex?

Spread cost is the difference between the bid and ask price, paid to the broker on each trade. For EUR/USD with a 1.2 pip spread on 1 standard lot: 1.2 × $10 = $12.00 per trade, or $24.00 round-turn.

How do you calculate spread cost?

Spread Cost = Spread in Pips × Pip Value × Number of Lots. Spread is ask−bid (in pips). Pip value is $10 per standard lot for most USD pairs. Multiply by lots to get total cost.

Which forex pairs have the lowest spread?

EUR/USD typically has the lowest spread (0.1–1.5 pips), followed by USD/JPY and GBP/USD (0.5–2 pips). Exotic pairs like USD/ZAR or USD/TRY can have spreads of 50–200+ pips. Always check your broker's live spreads.

Is spread cost the same as commission?

No. Spread cost is built into the price difference and paid automatically on every trade. Commission is a separate fixed fee (e.g., $3.50 per lot per side) charged by ECN and raw spread accounts. Some brokers charge both; others offer commission-free accounts with wider spreads.