Trading Costs Explained: Spread, Commission and Swap
Every leveraged trade pays up to three costs: the spread at entry, commission on both sides, and financing for every night it stays open. They are certain; the edge is not.
Three costs sit in every leveraged trade: the spread, paid at entry; commission, usually quoted round turn to cover entry and exit; and swap or financing, charged for every night the position is held, with three days commonly applied on one weekday for the weekend. Compare total cost per trade, not the headline spread.
What your costs total
Spread and commission are per trade; swap accrues per night held. Conversion fees, inactivity fees and data subscriptions are not modelled - read your broker's own fee schedule.
Open EURUSD on the M5 in our charting desk and look for it on real, current price - the same thing this page describes, on a chart that is moving. It is a free preview of the real desk, and a free guest account is required to open it: put in your email, we send a login code, and you are on a live chart in under a minute. The preview runs real market data with one indicator at a time - nothing is saved and no broker is connected. A preview of the product, not advice.
Open the live chart →The three costs, and when each is charged
- Spread - the gap between bid and ask, paid the moment you enter. Built into the price rather than billed separately.
- Commission - an explicit per-lot fee on raw-spread accounts, usually quoted round turn so it covers entry and exit.
- Swap or financing - charged or credited for every night the position is held, with most brokers applying three days on one weekday to cover the weekend.
Spread-only and raw-plus-commission accounts are two ways of charging for the same thing. Compare the total per trade, not the headline spread.
Costs are invisible until they are not. Chart Bound teaches the chart side for free while you work out the account side.
Play free, no signup →What the model shows
Put in your average spread, commission, size, trade count and typical hold, and the calculator totals what you pay per trade, per month and per year, then expresses it as a share of the money you risk per trade. That last figure is the one worth reacting to: it is the permanent handicap your strategy has to clear before anything else.
Cutting costs without breaking the strategy
- Fewer, larger trades beat many small ones when costs are a big share of the edge.
- Wider stops mean costs are a smaller percentage of risk - but only take them if the chart justifies the level.
- Avoid thin hours, when spreads widen - the session clock shows which hours those are.
- Check the financing direction before holding for days - swap calculator.
- Do not chase a "zero commission" label without checking the spread it comes with.
What this is not
It is not a full picture of your account: currency conversion, inactivity fees, withdrawal charges and data subscriptions all sit outside a per-trade model. Read your broker's own fee schedule.
Frequently asked questions
What are the main costs of trading?
Spread at entry, commission on entry and exit where charged, and overnight financing (swap) for each night a leveraged position is held.
Is a raw-spread account cheaper?
Only if the commission is lower than the mark-up you would have paid in the spread. Compare the total cost per trade for your typical size.
When is swap charged?
At the daily rollover, usually around 5pm New York time, with three days commonly applied on one weekday to cover the weekend.
Do costs really matter that much?
They are paid on every trade whether it wins or loses, so on short stops and high trade counts they can be a large share of the risk you take.
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Costs are invisible until they are not. Chart Bound teaches the chart side for free while you work out the account side.
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