An in-depth guide
Raw vs Standard forex accounts: calculate the break-even point
Worked examples covering spreads, opening and closing commission, and account currency. Find when Raw costs less, when Standard wins, and how to avoid counting the spread twice.
When Raw costs less than Standard
A Raw account costs less for a particular trade when its spread saving exceeds the additional opening and closing commission, after converting everything into the same currency. A spread advertised from zero does not make the trade free. You need the spread relevant to your trading time, the pip value and commission for both sides.
For a basic EUR/USD example in a USD account, a standard lot of 100,000 euros is worth USD 10 per pip when one pip is USD 0.0001 per euro. A USD 7 round-trip commission is therefore equivalent to 0.7 pips. If Raw saves only 0.5 pips against Standard, the commission exceeds the saving. The examples below are hypothetical, not price offers.
Set the units before doing the arithmetic
Define a round trip as opening and closing the same volume. Check whether commission is quoted per side or per round trip, per lot or per amount of turnover. A lot is not USD 100,000 in every pair: under the convention used here, EUR/USD represents 100,000 euros. Other products can have different contract sizes.
For the example, assume a constant spread, no slippage and an unchanged mid-price between opening and closing. Temporarily exclude overnight financing and other charges. These assumptions isolate the pricing structure; they do not describe market conditions. If the tariff has a minimum commission or rounding rules, include them before inferring what happens to small trades.
Worked example: 1 lot and 0.10 lots
Assume Standard has a 1.2-pip spread and no separate trading commission, while Raw has a 0.2-pip spread and charges USD 3.50 per lot per side. Pip value is USD 10 per lot, and commission scales proportionally with volume without a minimum.
Scroll the table horizontally to read every column.
| Component | 1 lot | 0.10 lots |
|---|---|---|
| Standard: spread cost | USD 12 | USD 1.20 |
| Raw: spread cost | USD 2 | USD 0.20 |
| Raw: opening and closing commission | USD 7 | USD 0.70 |
| Raw: total round-trip cost | USD 9 | USD 0.90 |
| Saving with Raw | USD 3 | USD 0.30 |
For instance, at 0.10 lots, each side's commission is USD 0.35. The calculation compares the same pair and volume; it does not apply a full-lot commission to a tenth-of-a-lot trade.
Why you do not double the spread as well
Buying at the Ask and selling at the Bid with an unchanged quote produces a loss equal to one spread. In the previous example, Raw's spread cost is 0.2 × 10 = USD 2 per lot, with two commissions added. Doubling the constant spread as well as charging both commissions overstates the cost.
When entry and exit spreads differ, a mid-price benchmark assigns half the spread to each side: the average of the two spreads multiplied by pip value and volume. This is a method of attributing cost, not necessarily an extra charge in a statement. If you calculate P&L directly from execution prices, the spread effect is already in the price difference; do not add it again.
Break-even and a case where Standard is cheaper
In a model with no Standard commission, Raw is cheaper when the spread difference in pips exceeds Raw's round-trip commission divided by pip value for the same volume. For the full-lot example, 7 ÷ 10 = 0.7 pips. With a 0.2-pip Raw spread, a 0.9-pip Standard spread produces a tie at USD 9.
If Standard actually offers 0.8 pips under the same assumptions, it costs USD 8 against USD 9 for Raw. An account label does not always win. When all costs scale with volume, more trades multiply the saving or disadvantage; they do not change the pip break-even point. Minimum commissions, volume discounts or a fixed subscription fee change the model.
Account currency can change the result
Now assume a EUR account, a constant hypothetical EUR/USD rate of 1.10 and a hypothetical Raw commission of EUR 3 per side per lot. A USD 10 pip is worth 10 ÷ 1.10, or about EUR 9.09. Round-trip commission is EUR 6, so break-even is 6 ÷ (10 ÷ 1.10) = 0.66 pips. Do not divide a euro commission by a dollar pip value without conversion.
An actual provider's currency tariff is not necessarily a simple conversion of its USD tariff either. Eightcap's international account page lists USD 3.50 and EUR 2.75 per side per standard lot, according to account currency. Those are the rates on that particular page; the hypothetical EUR 3 example must not be attributed to Eightcap.
Compare similar hours and conditions
An advertised minimum spread is not a sample of costs during the hours you trade. For a practical comparison, record the same pair at similar times, trade volume, charged commission and execution prices. Keep demo observations distinct from actual account charges, and do not turn one observation into a monthly average.
For an overnight position, add the applicable financing terms. Slippage, currency conversion and other charges can change the result even when the spread-and-commission calculation is correct. If Standard commission is not zero for the selected product, compare the difference in commission between the accounts. Do not automatically transfer a forex tariff to shares, indices or gold.
A worksheet before choosing an account
On the first line, record the pair, contract size and account currency; on the second, the spread and commission per side; on the third, the calculated round-trip cost and excluded charges. Treat a missing input as something to obtain, not as zero. This lets you update a tariff without rebuilding the comparison.
The FP Markets Standard and Raw comparison covers that company's offering, while the FP Markets versus Eightcap comparison covers provider selection. For a broader calculation, continue to total trading costs. This formula compares costs; deciding how much to trade separately requires position size and margin calculations.
