The answer

The answer: forex commission is fee basis x size x charged sides

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

Define the six representative fee modes

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.

• None (zero commission): charges no commission but usually quotes a wider spread; typical of spread-only pricing.
• Per-lot per side: charged for each side, per lot. A round trip is two sides (for example, $3.50 per side per lot becomes $7.00 round trip per lot).
• Per-lot round turn: one charge per lot covers the whole open-and-close cycle (for example, $6.00 round turn per lot).
• Fixed ticket: a flat amount per trade (or ticket) regardless of lots. It tends to be pricey on fractional lots and cheap on large ones.
• Notional percentage: a rate applied to notional value, as notional x rate; common for share CFDs.
• Minimum fee: a modifier that adds a floor, lifting the proportional charge up to the minimum when it falls below.

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

Per side vs round turn: when the charge lands

Commission is quoted in one of two ways of counting. Confusing them is the single biggest reason a total ends up doubled.

• Per side (one-way): charged once on entry and once on exit — two charges in total. “$3.50 per side” is $7.00 round trip.
• Round turn (round trip): charged just once for the whole open-and-close cycle. “$6.00 round turn” is $6.00 for the round trip in total.

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

The all-in cost equation: combine without dropping units

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.

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

Compare three fictional fee schedules on an all-in basis

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.

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.

Checks

Notional percentage, minimum fees, fractional lots and conversion

With the core formula settled, here are the four points that trip people up on a live account.

Notional percentage (notional-based)

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.

Minimum fees and fractional lots

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).

Converting between commission and account currency

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 “zero commission” labels

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

Check it in the commission-mode mini calculator

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).

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

Common misreadings and mistakes

Commission mistakes cluster into a handful of patterns. If any look familiar, open the fee schedule and execution policy on the spot and confirm.

• Confusing per side with round turn: reading $3.50 per side as round turn and estimating half the real cost — and vice versa, doubling it.
• Assuming “zero commission” means low cost: cost rides in the spread, so without an all-in comparison you miss the reversal.
• Not normalizing the comparison: if size, moment, holding period or account currency differ, comparing commission alone is meaningless.
• Ignoring the minimum fee: computing only the proportional amount on fractional lots understates the real, pricier burden.
• Confusing commission currency with account currency: adding the printed figure straight in and leaving the conversion error unaddressed.
• Auto-subtracting rebates or bonuses as a permanent discount: they carry conditions and expiry and cannot be fixed as a negative cost.
• Ignoring fill-price moves under a percentage schedule: when notional moves, the fee moves; do not treat it as fixed at the open.

Practical checks

A practical checklist for converting commission to all-in cost

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.

• Have you identified the schedule’s mode (none / per-lot per side / per-lot round turn / fixed / notional percentage)?
• Have you confirmed whether the figure is per side or round turn, without double-counting the charged sides?
• Did you compute commission = rate x size x charged sides (fixed is size-independent; percentage is notional x rate)?
• Have you checked whether a minimum fee applies and on what unit (per side / round turn, per ticket / order)?
• If the commission and account currencies differ, did you state the conversion direction and units?
• Have you added the spread round-trip cost and normalized to the round-trip all-in and per-lot figures?
• Is the comparison held to the same instrument, size, moment, holding period and account currency?
• Have you avoided auto-subtracting rebates or bonuses as a permanent discount?

Summary

Summary: the answer and your next step

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.

Related articles

Related reading

The rest of the cluster is available from the English article library.