“Commission-free” doesn't mean cost-free

Many brokers advertise “zero commission” or “no hidden fees” on their homepage. That claim can be technically true — and still misleading. When a broker doesn't charge a separate commission, that cost is almost always moved into the spread: the gap between the buy price (ask) and sell price (bid), marked up above the underlying market price.

A spread marked up by 0.3 pips per trade feels small on a single order. Multiplied by an active trader's daily volume, that markup can add up to more than the commission that looked “expensive” at a different broker.

The four cost layers to check

Broker trading costs generally break down into four categories, and different brokers lean on different proportions of each:

1. Spread — the bid/ask gap, charged on every trade regardless of whether the position wins or loses.

2. Commission — a flat or percentage fee per lot/volume, typically found on “raw spread” or ECN account types.

3. Swap / overnight fee — charged when a position stays open past the trading-day rollover; the direction (charged to you, or paid to you) depends on the instrument and position direction.

4. Non-trading fees — deposit, withdrawal, currency conversion, inactivity/dormancy charges. These are the ones most often missed because they live in the account terms document, not the main pricing page.

A simple worked example

Picture two brokers quoting the same currency pair for a standard 1-lot position:

Broker A: 1.2 pip spread, no separate commission. Broker B: 0.1 pip spread, plus a $7 round-turn commission per lot.

For an instrument with a pip value of roughly $10 per lot, Broker A charges about $12 via the spread. Broker B charges roughly $1 from the spread plus $7 commission — $8 total. The broker that looks like it has an “extra fee” is actually cheaper in this example — the opposite of the first impression you'd get from the headline “$7 commission” versus “commission-free.”

The figures above are illustrative to show the reasoning, not a quote from any specific broker — actual costs vary by broker, instrument, and account type, so always check the official pricing page before comparing.

Questions to answer before calling something “cheap” or “expensive”

Does my trading style hold positions overnight? If so, swap fees factor into the total; if it's purely intraday, ignore them.

What's my average trade volume/lot size? A small per-lot fee can add up at high volume, and vice versa.

Will I withdraw funds or convert currencies often? If so, check withdrawal and conversion fees, not just the per-trade cost.

Are the account types you're comparing actually equivalent? Broker A's “standard” account and Broker B's “raw spread” account have different cost structures — compare the same account type where possible.