How to Read a Broker's Spread and Commission Schedule
Learning how to read a broker's spread and commission schedule honestly is the single most useful skill for controlling your trading costs — yet most traders skim the headline number and move on. Spreads and commissions are quoted in different ways by different brokers, and the marketing page rarely shows you the full picture. This guide walks through exactly what to look for, in what order, so you can work out the real cost of a trade before you place it.
Why the Headline Spread Rarely Tells the Whole Story
Every broker website has a spreads page, and almost every one of them leads with an impressively tight number. That number is usually one of these:
- A minimum or "from" spread — the tightest the spread has ever been recorded, often for a fraction of a second
- A typical spread during peak liquidity — London/New York overlap, when volume is highest
- An average spread over a longer period, which is far more representative
None of these tell you what you'll actually pay at 3am, around a news release, or on a currency pair you trade regularly. If a schedule only shows "from 0.1 pips" with no average or time-of-day breakdown, treat it as a marketing figure, not a planning figure. Look for brokers who publish average spread data, and cross-check it against independent sources like PipTax's cost tool at /audit.html, which pulls live comparative figures rather than relying on what a broker chooses to publish.
Spread vs Commission: Two Charges, One Total Cost
A spread is baked into the price you're quoted — you don't see it as a separate line, but you pay it the moment you open a position. Commission is an explicit, itemised fee, charged per trade. Brokers structure these in three broad ways:
| Account type | Spread | Commission | Typical use case | |---|---|---|---| | Standard/market | Wider, spread-only | None | Simpler for beginners to read | | Raw/ECN | Very tight, near-zero | Charged per side or round turn | Preferred by high-frequency or scalping styles | | Hybrid | Moderate | Small, sometimes tiered | Middle ground offered by some brokers |
Neither structure is automatically cheaper — you have to add both together and compare the total against your own trading style. A trader doing three round turns a day feels commission far less than one doing thirty. Pepperstone, for example, offers both standard and raw-style accounts on the same MetaTrader infrastructure, and the honest way to compare them is to work out your all-in cost per round turn on each, not just glance at the spread column.
Reading Commission Schedules Without Getting Caught Out
Commission is quoted inconsistently across the industry, and this is where traders most often misread the schedule. Before comparing two brokers, confirm:
- Per side or per round turn — some brokers quote commission for opening only, others for the full open-and-close cycle
- Per lot or per 100k traded — standard lots and "per 100k" notional aren't always the same thing once you factor in non-USD pairs
- Currency of the commission — a commission quoted in USD costs a GBP-based account a different amount once converted, and that conversion itself may carry a markup
- Minimum charges — some schedules apply a minimum fee per trade regardless of size, which matters for small positions
A schedule that says "$3.50 per lot" is meaningless until you know if that's per side (so $7 round turn) or already the round-turn figure. When in doubt, ask the broker directly or check the fine print beneath the summary table — it's almost always there, just smaller and further down the page.
Account Type Changes the Maths Entirely
The same broker can show wildly different cost structures depending on which account you open. This is deliberate — account types exist to suit different trading styles, not to confuse you, but the effect is the same if you don't check carefully:
- Standard accounts fold the cost into a wider spread, so the schedule looks simple but may be more expensive for frequent traders
- Raw/ECN accounts show a near-raw interbank spread plus a visible commission, which looks scarier on paper but is often cheaper for active trading
- Professional or VIP tiers sometimes offer reduced commission at volume thresholds — worth checking if you trade regularly
IG, for instance, offers its own platform pricing structure alongside a MetaTrader option, and the two aren't always calculated the same way. Never assume the account type you're already using is automatically the cheapest one available to you — revisit this at least twice a year.
The Costs That Sit Outside the Spread and Commission Schedule
A spread and commission schedule is not the full cost picture. Several charges live on separate pages entirely:
- Swap/rollover rates for positions held overnight — check a dedicated swap page such as /rates.html, since these move with central bank rate changes
- Inactivity fees if your account sits dormant for a set period
- Currency conversion fees if you deposit, withdraw, or trade instruments in a currency different from your account base
- Guaranteed stop premiums, where applicable, on certain order types
None of these will appear in the main spread/commission table, so if you're building a full cost picture — particularly for swing or position trades held overnight — check the swap schedule separately rather than assuming it's covered.
A Simple Workflow for Reading Any Schedule Honestly
Use this checklist whenever you open a new broker's cost page:
1. Find the average spread, not just the "from" figure, ideally for your specific trading hours 2. Confirm commission structure — per side or round turn, per lot or per 100k, and in what currency 3. Add spread cost and commission together in pips or your account currency to get one number 4. Check the account type you're actually eligible for or planning to use — tiers change the maths 5. Look up swap rates separately if you hold trades overnight 6. Cross-check with an independent tool rather than relying solely on the broker's own marketing page
Learning to read a broker's spread and commission schedule this way turns a confusing page of numbers into a genuine decision-making tool. For live, comparable figures across brokers, run your typical trade size through PipTax's /audit.html cost tool, browse /brokers/index.html for a side-by-side look at regulated brokers including Pepperstone and IG, and check /methodology.html to see exactly how PipTax sources and verifies its cost data.
Key takeaways
- Spread and commission are two separate charges — you need to add them together to see the real cost per trade
- Published spreads are usually 'from' figures; average or median spreads during your trading hours matter more
- Commission is normally quoted per side, per lot, per 100k traded — check which one before comparing brokers
- Account type changes the maths: raw/ECN accounts pair tight spreads with commission, standard accounts fold cost into a wider spread
- Swap rates, inactivity fees and conversion charges sit outside the headline schedule but still hit your account
- Always verify live numbers with a broker's own schedule and PipTax's cost tool rather than relying on marketing pages
Frequently asked questions
- What's the difference between a spread and a commission?
- The spread is the gap between the buy and sell price, built into the price itself. Commission is a separate, explicit fee charged per trade, usually on raw or ECN-style accounts. Some brokers charge only a spread, some charge both a tighter spread plus commission, and a few charge commission with no markup at all.
- Why do brokers advertise spreads 'from' a certain figure?
- The 'from' figure is normally the tightest spread seen on that instrument, often during the most liquid part of the trading day. Your actual average spread will usually be wider, especially around news events, rollover, or outside London/New York overlap hours. Always ask for average or median spread data, not just the headline minimum.
- Is a zero-spread account actually free to trade?
- No. A zero or near-zero spread account simply moves the cost into commission instead. You still pay to trade — just via a different line item. Add spread and commission together to compare fairly against a standard account with a wider spread and no commission.
- How do I compare costs between a standard account and a raw/ECN account?
- Convert everything to cost per round turn in your account currency. Take the spread in pips, multiply by the pip value for your lot size, then add the commission charged for opening and closing the trade. Do this for both account types using PipTax's cost tool so you're comparing like with like.
- Do swap rates appear on the same schedule as spreads and commission?
- Sometimes, but often they're listed separately. Swap rates change with central bank rates and can shift daily, so check a dedicated swap or rates page rather than assuming the spread and commission schedule is the whole story, particularly if you hold positions overnight or over weekends.
- Why do two brokers with the same headline spread end up costing differently?
- Execution model, markup practices, and how commission is charged (per side vs per round turn, per lot vs per 100k) all affect the real cost. Two brokers quoting '0.6 pips + $3.50' can still differ once you check whether that $3.50 is per side or per round turn, and whether it's per standard lot or per 100k traded.