Bid, ask and spread
A broker normally quotes a bid price for selling and an ask price for buying. The difference is the spread. A position therefore begins with a cost equal to the spread, which can widen during low liquidity, important news or market stress.
Trading commissions
Some accounts charge an explicit commission per lot or per side and quote lower raw spreads. Other accounts build most of the charge into the spread. Compare the complete round-trip cost of opening and closing—not only the advertised minimum spread.
Overnight financing
Positions held across the broker’s daily rollover time may receive or pay financing, often called swap. Rates can differ for long and short positions, change over time and include a multi-day charge on a specified weekday to account for weekends.
Currency conversion
If the instrument profit, loss or fee is in a different currency from your account, the broker may convert it. The conversion rate or markup can create an additional cost that is easy to miss.
Non-trading charges
Check inactivity, deposit, withdrawal, data, platform and account-maintenance fees. A payment provider or bank may also charge separately. Read both the broker fee schedule and the client agreement.
Compare costs correctly
Estimate costs using the exact instrument, account type, typical trading time and expected holding period. Record actual spread, commission and financing from demo or small test trades. Minimum advertised spreads alone are not a reliable comparison.
- Calculate spread plus commission
- Include expected overnight financing
- Check withdrawal and conversion costs
- Review the fee schedule regularly
Forex and CFD trading involves substantial risk. Practise with a demo account and never risk money you cannot afford to lose.