How does the spread cost me money?

You buy at the ask and sell at the bid, so every round trip starts the spread's width in the red: cost = spread in pips × pip value for your size.

Is a commission-based account cheaper?

Often: raw-spread accounts charge ~0.0–0.3 pips plus a fixed commission (commonly ~$3.50 per lot per side, about 0.7 pips round trip). Add commission-as-pips to the spread and compare totals here.

What is a typical EUR/USD spread?

Roughly 0.6–1.5 pips on standard retail accounts and 0.0–0.4 pips (plus commission) on raw accounts, widening at rollover and around news.

Why does trade frequency matter so much?

Spread is paid per round trip, so the annual cost is spread × pip value × trades. Forty trades a month at $6 each is $2,880 a year — frequency multiplies the drag.

Do wider stops reduce spread impact?

Relatively, yes: a 1.2-pip spread is 12% of a 10-pip scalp target but around 1% of a 100-pip swing target — one reason scalping demands the tightest spreads.

Does this include slippage?

No — slippage is a separate, variable cost on top. Fast markets and large sizes make fills worse than the quoted spread.

Forex

Forex Spread Cost Calculator

Calculate what the bid-ask spread costs per trade and how it compounds over your monthly trade count — in your account currency, for any pair and lot size.

Spread cost is the money lost to the bid-ask spread on each round-trip trade: the spread in pips multiplied by the pip value of the position.

Spread cost per month

$240.00

Per trade: $6.00
Per year: $2,880.00
Pip value: $5.00

Slippage and commissions are extra unless you fold them into the spread input.

Worked example

A trader pays a 1.2-pip spread trading 0.5 lots (50,000 units) of EUR/USD, about 40 round-trip trades a month.

Pip value (0.5 lots): $5 per pip
Cost per trade: 1.2 × $5 = $6
Cost per month: $6 × 40 = $240
Cost per year: $240 × 12 = $2,880

The spread quietly costs about $2,880 a year — on a $10,000 account that is a 29% annual hurdle before the strategy makes its first dollar.

How this is calculated

Every round trip crosses the bid-ask spread once — you buy at the ask and sell at the bid — so each trade starts the spread's width in the red:

pipValue = pipSize × units × conversionRate
costPerTrade = spreadPips × pipValue
costPerMonth = costPerTrade × tradesPerMonth

To model a commission account, convert the commission to pips first (commission per round trip ÷ pip value) and add it to the spread input — the comparison between account types is then apples-to-apples.

When to use this calculator

Use this to see what your trading frequency really costs. Per trade the spread looks trivial; multiplied by your monthly trade count it becomes a fixed annual hurdle your strategy must clear before making anything.

It is the right tool for comparing brokers and account types: convert a commission into pip terms, add it to each account's typical spread, and compare the annual cost at your actual volume.

Scalpers and high-frequency traders get the most from it — at high trade counts the difference between a 1.2-pip and 0.4-pip effective spread often decides whether the strategy is viable at all.

Common mistakes

Judging a broker on headline spread alone — average spread during your trading hours, plus commission, is what you actually pay.
Ignoring how spread scales with frequency: costs that are negligible per trade dominate a high-frequency strategy's economics.
Using the quiet-market spread for pairs traded around news, when spreads widen several-fold.

Frequently asked questions

How does the spread cost me money?: You buy at the ask and sell at the bid, so every round trip starts the spread's width in the red: cost = spread in pips × pip value for your size.
Is a commission-based account cheaper?: Often: raw-spread accounts charge ~0.0–0.3 pips plus a fixed commission (commonly ~$3.50 per lot per side, about 0.7 pips round trip). Add commission-as-pips to the spread and compare totals here.
What is a typical EUR/USD spread?: Roughly 0.6–1.5 pips on standard retail accounts and 0.0–0.4 pips (plus commission) on raw accounts, widening at rollover and around news.
Why does trade frequency matter so much?: Spread is paid per round trip, so the annual cost is spread × pip value × trades. Forty trades a month at $6 each is $2,880 a year — frequency multiplies the drag.
Do wider stops reduce spread impact?: Relatively, yes: a 1.2-pip spread is 12% of a 10-pip scalp target but around 1% of a 100-pip swing target — one reason scalping demands the tightest spreads.
Does this include slippage?: No — slippage is a separate, variable cost on top. Fast markets and large sizes make fills worse than the quoted spread.