What's the difference between a spread and a commission?

Spread explained

The spread is the difference between the bid price (what you sell at) and the ask price (what you buy at). When you open a trade, you immediately lose money equal to the spread. On EUR/USD, a spread of 1.5 pips means you start 1.5 pips underwater. Spreads vary based on market conditions and trading volume.

Commission structure

Some brokers charge a flat commission per trade instead of (or in addition to) a spread. You might pay $5–10 per round-trip trade, regardless of pair or direction. Commission-based brokers often advertise tighter spreads.

Which costs less?

It depends on your trade frequency and size. High-volume traders often prefer commission models because tight spreads compound savings. Casual traders may pay less total fees through higher spreads and no commission. Always calculate the total cost: (spread in pips × pip value) + any commission, then compare across brokers.