A standard forex account usually builds the broker’s dealing charge into the spread. A raw spread account usually combines a narrower spread with a separate commission. Neither structure is automatically cheaper: the useful comparison is the total cost of opening and closing the same position under comparable conditions.
For UK traders comparing forex brokers, account labels are a starting point, not a verdict. Currency pair, trade size, trading hours, commission currency and holding period all affect the result. A headline spread of zero pips can still produce a more expensive trade than a commission-free account.
What separates standard and raw spread accounts?
On a typical standard account, the broker adds a markup to its quoted spread rather than charging a separate forex dealing commission. You buy at the ask price and sell at the bid price. The difference creates a trading cost even when no commission appears on your statement.
A raw spread account generally presents a spread with less or no broker markup, then charges commission separately. “Raw” does not mean every transaction has a zero spread, nor does it establish how the broker executes orders. Check the pricing schedule rather than treating the name as a technical guarantee.
The distinction between an underlying spread and a broker markup matters. A quoted spread can contain both, while commission may apply when opening and closing a contract. These cost components are addressed in ESMA’s questions and answers on CFDs and speculative products.
| Comparison | Standard account | Raw spread account |
|---|---|---|
| Quoted spread | Usually includes a broker markup | Usually narrower, with less or no markup |
| Forex commission | Often no separate dealing commission | Usually charged separately |
| Cost calculation | Spread cost plus other applicable charges | Spread cost plus commission and other charges |
| Main comparison trap | Assuming commission-free means cost-free | Comparing the spread without adding commission |
These descriptions concern forex pricing. Do not assume the same charging structure applies to shares, indices or commodities available through the same account.
Calculate the cost of a complete trade
Compare a round trip: opening a position and then closing it. For an initial estimate that excludes financing, currency conversion and slippage:
Estimated round-trip cost = spread in pips × pip value for the position + opening commission + closing commission.
This simplified formula assumes the spread stays unchanged. If it differs between entry and exit, a midpoint-based estimate uses half the entry spread plus half the exit spread, multiplied by pip value. Actual trade accounting should use the executed prices and separately charged fees.
Do not automatically count two full spreads because there are two transactions. With unchanged quotes, buying at the ask and immediately selling at the bid loses one spread. Commission quoted “per side”, however, normally needs counting twice.
A worked EUR/USD comparison
Assume a position of €100,000 in EUR/USD, where a pip is 0.0001 and the pip value is $10. These are hypothetical prices, not current broker offers. Readers using other pairs or account currencies should first check their pip values and position sizes.
| Cost component | Standard account | Raw spread account |
|---|---|---|
| Spread | 1.2 pips | 0.2 pips |
| Spread cost | $12 | $2 |
| Commission per side | $0 | $3.50 |
| Round-trip commission | $0 | $7 |
| Estimated total | $12 | $9 |
| Total expressed in pips | 1.2 pips | 0.9 pips |
The raw account saves $3 on this trade, not $10. Comparing only the displayed spreads would exaggerate the saving by ignoring commission.
Find the break-even spread
Convert the round-trip commission into pips by dividing it by the position’s pip value. Here, $7 ÷ $10 equals 0.7 pips. Add the raw spread of 0.2 pips and the total becomes 0.9 pips.
Under these assumptions, a standard spread below 0.9 pips would be cheaper. At 0.9 pips the accounts would tie. Above that, the raw account would have the lower dealing cost.
Frequency changes the amount saved, not necessarily which account wins. Fifty identical round trips would produce a $150 difference. That is a mathematical comparison, not a reason to place fifty trades.
Read the commission schedule carefully
A commission figure is incomplete without its charging basis. Before using it, establish whether it applies per side or per round trip, per lot or per unit of traded value, and in which currency.
For this comparison, suppose commission scales proportionally with position size and has no minimum. The raw account’s $7 round-trip commission becomes $0.70 at 0.1 lot and $0.07 at 0.01 lot. Its commission cost expressed in pips stays the same because the pip value falls in the same proportion.
A minimum charge changes that arithmetic. If a hypothetical account imposes a $1 minimum on each side, a 0.01-lot EUR/USD trade pays $2 commission. At $0.10 per pip, commission alone would equal 20 pips. Check whether any minimum applies before assuming a raw account suits small positions.
For a sterling account, convert dollar commission and dollar pip value into pounds using the same assumed exchange rate. If conversion has no extra charge, the pip-equivalent comparison stays unchanged. Any conversion fee must be added separately. The broader mechanics belong in the guide to broker payments and currency conversion.
Compare representative spreads, not advertised minimums
A spread advertised as “from 0.0 pips” tells you the lower advertised boundary. It does not tell you how often that price is available, which pairs receive it, or what your trades would cost.
Ask for the measurement period behind any average spread. Then compare the same currency pair during the hours you intend to trade. An average across an entire day may be a poor fit for someone who places orders during a short window.
Build your own comparison sheet around those hours. Record both account quotes at comparable times, rather than taking the best observed price from one account and an ordinary price from the other. Include less favourable observations instead of discarding them as inconvenient.
The same discipline applies to position size. A quote useful for a small order should not automatically become the assumed execution price for a much larger order. Where the available evidence does not show how size affects pricing, leave that uncertainty visible.
Separate quoted cost from execution quality
A narrow displayed spread is only part of the comparison. Examine the prices actually received, including favourable and unfavourable slippage, rejected orders and any delays relevant to your strategy. The guide to order execution, slippage and broker pricing covers those issues separately.
Suppose the raw account in the example saves 0.3 pips in spread and commission, but produces an extra 0.4 pips of adverse execution across entry and exit. Its apparent saving disappears. This is a hypothetical sensitivity test, not evidence that either account structure has worse execution.
Keep the accounting consistent. If your calculation already uses actual entry and exit prices, the spread and execution effects are embedded in the result. Adding an estimated spread charge again would double-count part of the cost.
Which structure fits different trading patterns?
Frequent trading and small price targets
When a strategy aims for a small move, a modest cost difference takes a larger share of that target. Against a hypothetical five-pip gross gain, a 1.2-pip dealing cost absorbs 24%; a 0.9-pip cost absorbs 18%. Neither figure says whether the strategy is profitable after losing trades and other expenses.
For this pattern, give more weight to representative spreads, commission and execution evidence. A raw account is worth considering when its combined cost is consistently lower, but the word “raw” is not a substitute for that calculation.
Occasional trades and smaller positions
A standard account can make bookkeeping simpler because there may be no separate forex commission to reconcile. That convenience has value only if you are comfortable with the resulting price.
Small positions do not automatically favour standard accounts. With proportional commission and no minimum charge, the relative cost comparison can remain unchanged. Minimum fees, rounding and contract sizes are the details that can alter it.
Positions held overnight
For longer holding periods, compare financing alongside the entry and exit costs. A small spread saving should not determine the decision if the intended holding period produces a larger difference elsewhere.
This is not just a theoretical omission: the FCA’s November 2025 review of CFD pricing and value found that many firms focused too narrowly on spreads. It also identified wide variations in effective overnight funding rates and weaknesses in disclosure.
Request the applicable long and short funding rates, the charging time and the treatment of weekends and holidays. For a planned holding period, calculate a total in money. “Lower spread” and “lower total cost” are different claims.
Build a like-for-like account comparison
Use a small set of representative trades rather than trying to declare one account cheapest for every possible situation. A practical comparison could include your usual pair and size, a smaller position, and a trade held for your typical overnight duration.
- Fix the assumptions. Use the same pair, position size, account currency, trading window and holding period.
- Calculate dealing costs. Combine a representative spread with both sides of commission.
- Add other applicable charges. Include financing, conversion and any account or platform fee relevant to your use.
- Check execution separately. Record what evidence exists and what remains uncertain.
- Repeat with less favourable assumptions. Test whether the preferred account still wins with a wider spread or worse execution.
A demo account can help you practise the calculation and inspect how charges appear. Do not treat a simulated result as proof of the price a live order will receive, or assume every live fee is reproduced without checking.
For historical strategy analysis, deduct both spread and commission consistently. A test that charges commission but assumes every transaction occurs at the midpoint gives the account an artificial advantage. The same principle applies when building and testing a forex strategy: costs belong in the test, not in a footnote afterwards.
Do not exchange UK protections for a cheaper account label
Confirm which legal entity would hold the account before comparing its price. A pricing offer from an overseas group company is not interchangeable with an offer from the group’s UK entity.
The FCA’s information on CFDs and rolling spot forex warns that moving to an overseas provider or opting up to professional status can remove retail protections. UK retail CFD safeguards include restrictions on borrowing exposure, margin close-out rules and negative balance protection. They do not prevent trading losses.
Standard and raw are pricing descriptions, not substitutes for regulatory status. Check the contracting entity and client classification before deciding that a lower commission represents better value.
Choose on total cost, not the account name
A raw spread account is cheaper when its spread plus round-trip commission beats the standard account’s spread, after accounting for relevant differences in execution and other charges. A standard account can be cheaper when its spread is sufficiently narrow or the alternative’s commission structure is unfavourable.
Use realistic inputs, compare complete trades and keep the risk decision separate from the pricing decision. Reducing costs improves the arithmetic. It does not turn an unprofitable trading method into a sound one by itself.