Spread Cost Calculator: What the Spread Really Costs You
A one-pip spread sounds like nothing. At twenty trades a week on a ten-pip stop it is a tenth of everything you risk, paid whether you are right or wrong.
Spread cost per trade is the spread in pips multiplied by the pip value per lot multiplied by your lot size, plus any commission. The number that changes behaviour is cost as a share of your risk: a two-pip spread against a twenty-pip stop is 10% of everything you risk, paid whether the trade wins or loses.
Spread cost calculator
Cost = spread × pip value × lots, plus commission. Pip values are typical for a USD account. Use your real average spread, not the advertised minimum.
The calculation
Cost per trade = spread in pips × pip value per lot × lots, plus commission if your account charges it separately. The calculator uses the same pip-value engine as the rest of the site, so gold and JPY pairs are handled properly rather than assumed.
The number that changes behaviour
Cost per trade is easy to shrug off. Cost per month at your actual frequency is not, and neither is cost as a share of your risk. A two-pip spread against a twenty-pip stop is 10% of your risk on every trade - a permanent handicap that no entry technique removes.
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Play free, no signup →Where spreads bite hardest
- Scalping. The shorter the stop, the larger the spread is relative to it. See scalping for beginners for the trade-off.
- Thin hours. Spreads widen outside the main sessions and around rollover; the session clock shows when you are trading.
- News. Spreads can multiply for a few seconds around releases, which is also when stops are most likely to slip.
- Exotic pairs and small-cap instruments, where the quoted spread is a bigger share of a typical move.
Using it well
Put your real average spread in, not the broker's advertised minimum, and your real trade count. Then check the result against your measured expectancy: if costs are a large fraction of the edge, the fix is usually fewer and larger trades rather than a different strategy. The break-even win rate calculator shows the same problem from the other direction.
Frequently asked questions
How do I calculate spread cost?
Spread in pips times the pip value per lot times your position size, plus any separate commission. The calculator handles the pip value for you.
Is a raw spread account cheaper?
It depends on the commission. Compare total cost per trade - spread plus commission - rather than the headline spread.
Why is my spread wider than advertised?
Advertised spreads are usually typical or minimum values in good conditions. Spreads widen in thin hours and around news.
Does the spread matter for swing trading?
Much less than for scalping, because it is a small share of a wide stop. Swap becomes the bigger cost on long holds.
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