Spreads, Commissions and Swap
A 1-minute lesson from the MarketPro academy, one of 24 in forex basics.
Every quote has two prices: the bid (where you can sell) and the ask (where you can buy). The difference is the spread, and it is the most visible cost of trading.
The spread
Every quote has two prices: the bid (where you can sell) and the ask (where you can buy). The difference is the spread, and it is the most visible cost of trading. If EUR/USD is quoted 1.08500 / 1.08512, the spread is 1.2 pips. A new position starts slightly in loss by exactly the spread.
Commissions
Some account types offer very tight spreads but charge a fixed commission per lot per side instead. Neither model is automatically cheaper — compare the all-in cost (spread plus commission) for the pairs and sizes you actually trade.
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Not investment advice. Past performance is not indicative of future results.
Step 5 of 12 on Forex Foundations
Run the numbers while this is fresh
The arithmetic in this category has a free calculator on this site, no sign-up and nothing leaves your browser: Pip value calculator, Position size calculator, Margin calculator, Leverage calculator.
The whole academy is free in the app
All 320 lessons, 12 guided paths, quizzes and a daily streak. Free on every account, with vetted free signals alongside it.
Not investment advice. Past performance is not indicative of future results.