Spread vs Commission — The Long-Run Math for Active Traders

Most retail forex brokers offer two account archetypes: a spread-only standard account where the broker marks up the underlying spread by 0.5-1.5 pips and charges no separate commission, and a raw-spread account where the broker passes through near-interbank spreads and charges an explicit per-side commission. The choice between the two looks like a binary preference. Over a multi-year active-trader horizon, the compounding implications are larger than the per-trade math suggests. This piece walks the long-run arithmetic.

The per-trade picture

We covered the per-trade comparison in [/blog/how-brokers-make-money-raw-spread-accounts-commission-math-2026](/blog/how-brokers-make-money-raw-spread-accounts-commission-math-2026). The short version: at typical EU-broker rates a Standard EUR/USD trade carries an implied cost of approximately USD 10 per round-turn lot (1.0-pip spread mark-up at parity), versus a Raw Spread trade at approximately USD 7-8 per round-turn lot (USD 3.50 per side commission plus residual 0.1-0.2 pip execution markup).

The Raw Spread account is cheaper by USD 2-3 per round-turn lot. This is the headline saving.

Where the per-trade saving comes from

The per-trade saving is real but it is not a free transfer from the broker to the client. The Raw Spread account requires the client to:

- Trade volume sufficient to amortise the commission line item (the standard account's marginal cost on small trades is competitive with Raw at low-lot volumes) - Pay attention to commission as a separate cost component when sizing positions - Tolerate the cognitive overhead of two cost line items rather than one

For most retail clients trading 1-5 lots per month the Standard account is the right home. For active clients trading 10+ lots per month the Raw account is materially cheaper. The break-even is around 5-7 lots per month at typical EU-broker rates.

The multi-year compounding effect

The per-trade USD 2-3 saving compounds in a way that is easy to underestimate. We walk a specific scenario.

**The scenario.** A self-directed retail trader, EUR 25,000 starting capital, trading EUR/USD as the primary pair. The trader holds positions intraday-to-overnight (so swap costs apply for some positions but are not the dominant variable). The trader trades 50 round-turn lots per month consistently over a 10-year horizon. The trader does not change strategy, broker, or pair mix.

**On the Standard account at 1.0-pip mark-up.** Monthly cost = 50 lots × USD 10 = USD 500. Annual cost = USD 6,000. 10-year cost = USD 60,000.

**On the Raw Spread account at USD 3.50 per side commission plus 0.1-pip execution markup.** Monthly cost = 50 lots × USD 8 = USD 400. Annual cost = USD 4,800. 10-year cost = USD 48,000.

**The differential.** Standard - Raw = USD 12,000 over 10 years. On the EUR 25,000 starting capital this is 48% of the initial capital. As a drag on the trader's compound return it is meaningful — every USD of cost paid is USD not available for re-investment or withdrawal.

The differential scales linearly with trading volume. A trader doing 100 lots per month accumulates USD 24,000 of incremental cost on the Standard account over 10 years versus Raw. A trader doing 25 lots per month accumulates USD 6,000.

What the math does not capture

Three honest qualifications to the simple linear arithmetic above:

**Execution-quality differences.** The implied cost of a Standard account at 1.0-pip mark-up assumes the broker's execution is delivering the marketed spread reliably. If the broker's typical execution adds 0.3-0.5 pips of unintended slippage on the Standard account (because the marketed spread is the headline rather than the realised), the effective cost is higher than USD 10 per round-turn. A well-executed Standard account at the marketed spread can be competitive with a poorly-executed Raw account. The MiFID II RTS 28 disclosure is the formal mechanism for comparing execution quality across account types and brokers — see [/blog/mifid-rts-28-execution-report-what-it-reveals-about-your-broker](/blog/mifid-rts-28-execution-report-what-it-reveals-about-your-broker).

**Pair mix.** The 1.0-pip mark-up assumption holds for major-pair trading. Exotic pairs and gold typically have wider mark-ups on Standard accounts (3-5 pips on USD/MXN, 30-50 pips on XAU/USD). The Raw account compresses these spreads dramatically but the comparable commission may be higher on the wider-spread instruments. A trader whose mix is dominated by exotic pairs sees a larger Standard-vs-Raw saving than a trader who only trades EUR/USD.

**Swap-rate competitiveness.** Brokers vary substantially in the markup applied to overnight swap rates. A broker with cheap per-trade cost can have expensive swap rates and net out worse for a position-held-overnight trader. The Standard-vs-Raw choice does not always correlate with swap-rate competitiveness — both account types at the same broker typically use the same swap-rate table.

**Tax treatment.** For some clients the trading costs are deductible against trading income for tax purposes; for others they are not. The after-tax cost differential between Standard and Raw can differ from the pre-tax differential depending on jurisdiction and client status.

The 100-month-rolling cost ratio

A more useful diagnostic than the per-trade saving is the 100-month-rolling cost ratio. The ratio is:

**Total trading cost in the trailing 100 months / Total realised P/L in the trailing 100 months**

For most retail traders this ratio is greater than 1 — trading costs exceed trading profits. For profitable traders the ratio is less than 1.

A retail trader who has traded 50 lots per month for 100 months has paid approximately USD 50,000 in costs on a Standard account or USD 40,000 on a Raw account. If their realised P/L over the same period is USD 20,000 the cost ratio is 2.5 (Standard) or 2.0 (Raw). The trader is paying 2-2.5x in cost what they realise in profit. The Raw account saving of 0.5 on the ratio is the difference between two outcomes that are both structurally money-losing.

For a trader with realised P/L of USD 80,000 over the same period, the ratio is 0.6 (Standard) or 0.5 (Raw). The trader is paying 50-60 cents of cost per dollar of profit. The Raw account saving represents 17% reduction in the relative cost drag — a meaningful improvement at the margin.

The implication is that the Standard-vs-Raw choice matters most for traders whose realised P/L is in the same order of magnitude as their trading cost. For consistently large-winners the choice is less impactful; for consistently large-losers it is also less impactful (other variables dominate). The choice has the largest impact in the middle — traders who are close to break-even or modestly profitable.

What about brokers that offer only one account type?

Some EU brokers offer only a Standard account; others offer only a Raw/Pro account; most offer both. The choice of broker upstream of the account-type choice is more consequential than the within-broker account-type choice.

Three patterns:

**Brokers offering Standard-only.** Typically these are larger market-maker brokers running an internalised execution model. The Standard account is the broker's default product. The Standard-only offering does not signal anything intrinsically negative — it reflects the broker's commercial model. The relevant question is the execution quality at the marketed spread.

**Brokers offering Raw-only.** Typically these are smaller ECN/STP brokers without a developed Standard-tier offering. The Raw-only offering signals the broker's commercial focus on active traders. The relevant question is the commission level and whether the broker has the LP relationships to deliver competitive raw spreads.

**Brokers offering both.** The dominant pattern. The choice for the client is between the two within the same broker. The economics described above apply.

What this means for choosing an account

Three practical principles:

**Compute your own break-even.** The break-even between Standard and Raw is volume-dependent. Use the formula: (Standard mark-up in pips × USD per pip) > (commission per side × 2 + Raw execution markup × USD per pip). For EUR/USD at parity and standard EU-broker rates this resolves to roughly 5-7 lots per month. For higher-spread instruments the break-even shifts.

**Re-evaluate quarterly.** Trading volume is rarely stable. A trader whose monthly volume has grown from 5 to 15 lots may have crossed the break-even without noticing. A trader whose volume has dropped from 30 to 8 lots may be paying for Raw infrastructure they no longer need.

**Pair with execution-quality assessment.** The Standard-vs-Raw saving is meaningful only if execution is comparable across account types. A broker's RTS 28 disclosure provides the basis for comparing execution quality. If execution on Standard is materially worse than Raw at the same broker (it often is), the per-trade saving on Raw is bigger than the headline arithmetic suggests.

For per-broker detail on Standard and Raw account economics across the EU operators see the individual reviews of [Pepperstone](/brokers/pepperstone), [IC Markets](/brokers/ic-markets), [Tickmill](/brokers/tickmill), [Exness](/brokers/exness), and [FxPro](/brokers/fxpro). For the per-trade math see [/blog/how-brokers-make-money-raw-spread-accounts-commission-math-2026](/blog/how-brokers-make-money-raw-spread-accounts-commission-math-2026).

Risk warning

Trading CFDs and leveraged forex carries a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. Lower trading costs do not change the underlying probability that a trading strategy is profitable. The single biggest determinant of retail trading outcome is position sizing and risk management, not the spread-vs-commission choice.

*This article reflects published commission schedules and account types as of May 2026. Broker pricing structures change continuously — always verify current rates on the broker's own pricing page before opening an account.*