Financial Market Tools for Traders, Investors & Finance Professionals
Learn — Trading Cost Series 03
Forex and CFD commission follows one core rule: fee basis x trade size x charged sides. If you do not check whether the schedule is quoted per side or round turn, your total cost is doubled or halved. This guide sorts out the fee modes — none, per-lot per side, per-lot round turn, fixed ticket, notional percentage and minimum fee — and converts each into a spread-inclusive all-in cost and break-even, using unit-aware fictional examples.
Key takeaways
fee basis x trade size x charged sides. Per side vs round turn decides whether you charge two sides or one.The answer
Here is the direct answer. Forex and CFD commission cost is fee basis x trade size x charged sides. The part that trips people up is the charged sides: if the schedule is quoted per side, a round trip is charged twice, on entry and exit; if it is quoted round turn, one charge covers the whole cycle. Miss that distinction and your total is doubled or halved. For example, on an account quoting “$3.50 per side per lot”, a 1.0-lot round trip is 3.50 x 1.0 x 2 = $7.00 in commission.
Commission alone, though, is not the full picture of trading cost. Because a zero-commission account still bakes cost into the quoted spread, a fair comparison has to be normalized to a spread-inclusive all-in cost. This article concentrates on reading the fee basis (per side vs round turn, per lot vs fixed vs percentage) and combining it correctly. Spread on its own is converted in the guide to turning the forex spread from pips into money, and break-even and cost ratio are handled in the break-even pips and price article.
If you want the full map of trading cost — spread plus commission plus swap — start with the pillar, the complete trading cost calculation guide, which shows where this lesson fits. Every figure and fee schedule below is fictional educational data; none represents a specific broker’s pricing or a future cost.
Pricing structures
A commission schedule is expressed as one of the following six modes, or a combination of them. Start by identifying which one your account uses.
notional x rate; common for share CFDs.The decision tree below is a conceptual aid for reading a schedule and branching to the right mode (it scrolls horizontally).
Once the mode is identified, the next thing to confirm is “one side or two”. Get that wrong and every calculation that follows is doubled or halved.
Charged sides
Commission is quoted in one of two ways of counting. Confusing them is the single biggest reason a total ends up doubled.
The diagram below shows how the charge lands on the same round-trip trade under per-side pricing (two charges) and round-turn pricing (one charge).
The point is that whether the quote is per side or round turn, what you ultimately compare is the round-trip total. Check whether the printed figure is per side or round turn, then multiply by two for per side or leave it as is for round turn — that one step prevents both double-counting and half-counting. The higher the turnover, the more this difference compounds, so the style-by-style impact is covered in the cost comparison of scalping, day trading and swing trading.
The equation
Let’s build commission on its own, and the spread-inclusive round-trip all-in cost, keeping units attached. First, the commission amount by mode.
Commission amount by mode
Where a minimum fee applies, replace the per-side amount with max(per-side amount, minimum fee) before multiplying by the charged sides.
Round-trip all-in cost
Worked substitution: raw + per-side commission, 1.0 lot (fictional)
Pip value is “the account-currency amount per lot per pip”. Here we assume a fictional EURUSD 1.0 lot = $10 per pip. If the commission currency differs from the account currency, multiply the fee by the conversion rate [commission currency to account currency] before combining.
This equation exists to put spread and commission on the same “round-trip, account-currency” footing. The detailed reading of break-even (how many pips of move recover the cost) and cost ratio is left to the article on break-even pips, cost ratio and friction score; here we lock down the combination.
Comparison
For the same instrument (EURUSD), size (1.0 lot), moment, holding period and account currency, we normalize three fictional fee schedules to a round-trip all-in cost. Pip value is $10 per pip per lot (fictional). This is not a “cheapest” ranking — it is an educational example of the comparison method.
| Fee schedule | Quoted spread | Commission mode | Spread round-trip cost | Commission round trip | All-in round trip | Break-even |
|---|---|---|---|---|---|---|
| A: Standard (spread-only) | 1.2 pips | None | $12.00 | $0.00 | $12.00 | 1.2 pips |
| B: Raw + per-side commission | 0.2 pips | $3.50 per side/lot | $2.00 | $7.00 | $9.00 | 0.9 pips |
| C: Raw + fixed round-turn commission | 0.4 pips | $6.00 round turn/lot fixed | $4.00 | $6.00 | $10.00 | 1.0 pips |
In this fictional example the zero-commission schedule A ($12.00) is the most expensive, and raw + per-side commission, schedule B ($9.00), is the least. It shows that “zero commission” does not mean “low cost”. That ordering can reverse under other conditions: if the spread widens during volatility, schedule A’s burden grows further, while the fixed commissions of B and C stay stable relative to size. Conversely, at very small lots a minimum fee can make B and C the pricier choice.
The stacked bars below split each schedule’s round-trip all-in into a “spread” part and a “commission” part.
This breakdown shows that schedule A’s cost sits entirely in the spread, while most of B’s and C’s rides on commission. Where the cost concentrates changes how a widening spread or a longer hold affects it. The method for lining up several account types fairly is covered in detail in the guide to comparing broker and account trading costs.
Checking a single fee schedule is well within the free tier. When you want to place none, per side, round turn, fixed and notional percentage side by side under the same conditions to compare all-in cost and break-even — or to see the sensitivity when the spread widens — the Trade Cost Calculator’s Pro commission-mode comparison helps. Saving, ledgers and report export sit outside Pro.
Checks
With the core formula settled, here are the four points that trip people up on a live account.
For share CFDs and similar products, commission can be charged as a percentage of notional value. notional = contract size x price x lots, and the rate is applied to it. As a fictional example, if a 1-lot notional is $110,000 (= 100,000 x 1.1000) and the rate is 0.003% per side, then per side = 110,000 x 0.00003 = $3.30 and round trip = $6.60. Because notional moves as the price moves, note that with a percentage schedule the fee amount changes with the fill price.
A minimum fee bites when the proportional charge falls below the floor. On an account with $3.50 per side per lot and a $2.00 per-side minimum, trading 0.1 lot gives a proportional $0.35 per side, but the floor lifts it to $2.00 per side and $4.00 round trip. On a per-lot basis that is the equivalent of $40.00 round trip — far pricier than the $7.00 round trip at 1.0 lot. The smaller the trade, the larger the minimum-fee effect, and the result depends on the applied unit (per side or round turn, per ticket or per order).
| Lots | Proportional per-side fee | Per side after minimum | Round-trip commission | Round trip per lot |
|---|---|---|---|---|
| 1.0 lot | $3.50 | $3.50 | $7.00 | $7.00 |
| 0.5 lot | $1.75 | $2.00 | $4.00 | $8.00 |
| 0.1 lot | $0.35 | $2.00 | $4.00 | $40.00 |
When commission is quoted in a currency other than your account currency, make conversion a separate stage. First fix the amount in the commission currency, then multiply by the commission currency to account currency rate, stating the direction and units explicitly. Treating the printed figure as if it were already in your account currency under- or over-states the cost by the conversion amount. Because this relates to how P&L and spread are converted too, ongoing management including currency conversion is covered in the audit-ledger article on dividend adjustments, rollover and FX conversion.
Rebates, cashback and bonuses can carry conditions, jurisdictional differences and expiry dates, so they should not be auto-subtracted as a permanent “negative cost”. And a “zero commission” label can still leave other costs — spread, swap or funding, and currency conversion — in place. Swap and funding calculation can be reached from the full cost picture in the pillar guide. If you do include a commission credit (positive carry or a rebate), label the sign explicitly and never signal favourable or adverse by colour alone.
If the fundamentals of size and lots are still fuzzy — how many units a lot is, how pip value is derived — settle them first with the related cluster’s guide to lots, quantity and pip value, and this article’s arithmetic will go more smoothly.
Check it
The mini teaching aid below takes lots, fee mode, rate, charged sides, the spread round-trip cost and an optional minimum fee, and displays total commission, spread-inclusive round-trip all-in, cost per lot and break-even pips, each with its formula. It is a simplified aid for understanding the article; it does not include swap or funding, tax, deposit or withdrawal fees, or slippage. The calculation runs entirely in your browser and neither transmits nor stores your inputs.
First, so it can be read even when JavaScript is unavailable, here is a static fictional educational worked example that matches the default inputs (schedule B: raw + per-side commission).
| Item | Value / formula |
|---|---|
| Lots | 1.00 lot |
| Fee mode | Per-lot per side |
| Rate | $3.50 /lot/side |
| Charged sides | 2 (per side x 2 = round trip) |
| Spread round-trip cost | $2.00 |
| Minimum fee | $0.00 (none) |
| Pip value | $10.00 /pip/lot |
| Total commission | 3.50 x 1.00 x 2 = $7.00 |
| All-in round trip | 2.00 + 7.00 = $9.00 |
| Per lot | 9.00 / 1.00 = $9.00 |
| Break-even | 9.00 / (10 x 1.00) = 0.9 pips |
Commission-mode mini calculator (educational, computed in-browser)
Switch the mode to “None” and commission drops to zero, so you can see the cost fall back to spread alone. The mini calculator is a teaching aid; the values you actually trade on are best confirmed in the free calculator with your own account conditions.
Misreadings
Commission mistakes cluster into a handful of patterns. If any look familiar, open the fee schedule and execution policy on the spot and confirm.
Practical checks
When reading a fee schedule, confirming in this order builds the all-in cost accurately. None of these is a trading decision — they are steps for understanding cost.
FAQ
Summary
Forex and CFD commission is calculated as fee basis x trade size x charged sides, and you must always confirm whether the schedule is per side or round turn — two charged sides or one. Miss that and the total is doubled or halved. Then, rather than commission alone, it is only by normalizing to the round-trip all-in cost of spread round-trip cost + commission that you can fairly compare whether an account type is favourable.
“Zero commission” is just one pricing structure; because cost rides in the spread, it is not necessarily low cost. A minimum fee makes fractional lots pricier, and a commission currency that differs from your account needs conversion. Confirm a single schedule in the free calculator first, and when you want several modes lined up under the same conditions, move on to Pro’s commission-mode comparison — a natural progression with no pressure.
Read next
TC04: Break-even pips and price — calculate cost ratio and trading friction — once you can produce an all-in cost, the next step is finding how many pips of move recover it.
Sources
Every figure in this article is fictional educational data. Confirm actual commission, spread, contract specifications and execution policy against primary sources such as these.
Disclaimer