Broker commission

A broker commission is a fixed fee per trade charged on top of the spread, usually in dollars per lot. It is typical on tight-spread accounts such as ECN or raw spread accounts.

How it works

A broker makes money on a trade in two main ways: the spread (the gap between buy and sell price) and a commission. Standard accounts often have no commission but a wider spread. ECN accounts have near-zero spreads but charge, for example, $3–7 per lot round turn, meaning open plus close.

Check how the fee is quoted: per side or round turn. "$3.50 per lot per side" means $7 to open and close one lot. Commission scales with size, so 0.1 lot costs a tenth of what 1 lot does.

To compare accounts, add spread and commission into one cost per trade in pips or dollars. For scalping and frequent trading this is your main cost. For rare long-held trades, overnight swaps matter more.

Example with numbers

Account A: 1.2-pip spread on EUR/USD, no commission. At 1 lot a pip is $10, so a trade costs $12. Account B: 0.2-pip spread plus $7 round turn. Total $2 + $7 = $9. Account B is $3 per lot cheaper, which is $300 a month over 100 trades.

Common mistake

Beginners compare spreads only and pick "zero spread" without noticing the commission, or mix up per-side and round-turn pricing. Always convert everything into the full cost of one trade at your lot size, and add swaps if you hold positions overnight.

Questions and answers

What is a broker commission in simple terms?

It is a fee for every trade, usually a fixed amount per lot. It goes to the broker in addition to the spread.

Is a no-commission account better than a raw spread account?

Add spread and commission into one cost per trade and compare. For active trading, tight spread plus commission is often cheaper, but not always.

What does round-turn commission mean?

It is the fee for opening and closing a trade combined. If the price is quoted per side, double it.

Broker commission

How it works

Questions and answers

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