The raw spread illusion

[Amanhasnoname]

An account advertising spreads from 0.0 pips sounds like a gift to scalpers. Then the commission shows up, and the real cost is often identical to a standard account with a 1.2 pip spread.

The thing to compare is total round-turn cost: spread plus commission, converted to pips. A 0.1 pip spread with 7 dollars per lot round-turn commission is roughly 0.7 pips of commission on top, so 0.8 pips all in. A standard account at 1.0 pip all in is only 0.2 pips more expensive, which matters, but far less than the marketing implies.

Where raw accounts really win is during active hours, when the spread stays tight and the commission is constant. Where they lose is the slow rollover period, when the raw spread balloons while the commission stays the same.

Another detail is that some brokers add a small markup on the raw feed, so the quoted 0.0 is not actually the interbank price.

The only way to know is to measure the all-in cost on real trades over a few weeks, across sessions.

What does the actual all-in cost look like on your account, and was it close to what the broker advertised?