Platform spread display versus actual fill spread

[Fairman]

Platform spread display versus actual fill spread

The spread shown on the screen is the difference between the best bid and the best ask at that moment. The cost of a trade depends on the actual fill prices, which may differ when orders are large or when the market is moving.

On ECN accounts with depth, the effective spread for a larger order is wider than the top-of-book spread, since part of the order fills at deeper levels. On accounts with markups applied at execution rather than in the quote, the screen spread may omit them entirely.

To find out, compare the fill prices of a buy and a sell executed close together. The difference is the realized round-trip cost. Repeat several times and average.

If the realized cost is consistently higher than the displayed spread plus commission, something is being added: slippage, markup, or delay.

This simple measurement gives a truer cost baseline than any marketing material. It also helps in comparing different brokers on equal terms.

How does the realized round-trip cost compare to the quoted spread on the account in use?