Zero spread plus commission: when does it actually win?

[Fairman]

Zero spread plus commission: when does it actually win?

An account advertised at "from 0.0 pips" with a 7 dollar round turn commission per lot sounds cheaper than a plain 1.0 pip spread account. The arithmetic needs a closer look.

Seven dollars per standard lot round turn is 0.7 pips. Add the raw spread, say 0.1 to 0.3 on EURUSD in calm conditions, and the true cost lands around 0.8 to 1.0. That is roughly level with the spread-only account.

Where the difference opens up:

Calm markets: raw account wins slightly.

Busy but orderly markets: raw account wins clearly, because the commission stays fixed while a standard spread would widen.

Thin or news-driven conditions: raw spreads widen hard, and the advantage shrinks or reverses.

Exotic pairs: the commission becomes almost irrelevant next to a raw spread that moves around a lot.

The only honest answer comes from a month of real trades on each account type, totalling the real cost per round turn instead of the advertised one. Averages from the marketing page rarely survive that exercise.

For scalpers working at one to two pip targets, every tenth of a pip is a tenth of the whole profit. It deserves an actual spreadsheet.

An example with numbers: on EURUSD, a raw account averages 0.2 pips of spread plus 0.7 pips of commission, 0.9 in total. A standard account averages 1.1. Over 500 round turns a month, the raw account saves about 100 pips, roughly the value of one decent trade day. The picture flips on a pair where the raw spread averages 1.5, because the commission then sits on top of an already wide quote.

One more variable is the commission currency. A fee quoted in dollars on an account denominated in euros gets converted, and the conversion adds a small drift that moves the true cost around a little from month to month.

Which account type came out cheaper after the real numbers were counted?