Commission versus spread: the maths most traders skip
Posted: Fri Oct 30, 2026 12:41 pm
Commission versus spread: the maths most traders skip
A raw spread account with a commission looks cheaper than a standard account with a wider spread. Often it is. But the comparison is usually done on the advertised average, which is the wrong number.
Take a standard account at 1.2 pips average on EURUSD and a raw account at 0.1 pip plus 7 dollars round turn per lot. At a 7 dollar commission the raw account costs about 0.7 pip equivalent, so the total is 0.8. Cheaper, apparently.
Now factor in what actually happens. Raw spreads blow out more at rollover and during news. The standard account's spread is smoother, because the markup absorbs swings. During a particular hour the raw account might be paying 1.5 pips plus commission while the standard sits at 1.8. Over a full day the gap narrows or flips.
The honest comparison needs the average cost per trade at the exact times the strategy trades. Not the whole day. Not the advertised figure.
Method: export a month of trades, multiply lots by the commission, add the spread paid at entry time from tick data or from the platform's history, and divide by trades. One number, and it is probably different from the marketing.
Which account type came out cheaper after doing the calculation for the specific trading hours?
A raw spread account with a commission looks cheaper than a standard account with a wider spread. Often it is. But the comparison is usually done on the advertised average, which is the wrong number.
Take a standard account at 1.2 pips average on EURUSD and a raw account at 0.1 pip plus 7 dollars round turn per lot. At a 7 dollar commission the raw account costs about 0.7 pip equivalent, so the total is 0.8. Cheaper, apparently.
Now factor in what actually happens. Raw spreads blow out more at rollover and during news. The standard account's spread is smoother, because the markup absorbs swings. During a particular hour the raw account might be paying 1.5 pips plus commission while the standard sits at 1.8. Over a full day the gap narrows or flips.
The honest comparison needs the average cost per trade at the exact times the strategy trades. Not the whole day. Not the advertised figure.
Method: export a month of trades, multiply lots by the commission, add the spread paid at entry time from tick data or from the platform's history, and divide by trades. One number, and it is probably different from the marketing.
Which account type came out cheaper after doing the calculation for the specific trading hours?