How to use the forex spread calculator
- Choose the pair and your account currency. The calculator uses standard pip sizes: 0.0001 for most pairs, 0.01 for yen pairs and the conventions of the pip value calculator for gold and silver.
- Enter the bid and the ask exactly as your platform shows them, including the fifth decimal (third for yen pairs). Check them at the time of day you actually trade.
- Enter your position size in lots.
- Enter a conversion price if the form asks for one. When your account currency is neither of the pair’s two currencies, the calculator names the one price it needs, for example GBP/USD for EUR/GBP in a dollar account.
- Add a commission if you trade on an ECN or raw-spread account. Enter the round-turn amount per lot: opening plus closing.
- Enter how many trades you make a month to see the monthly and yearly cost.
The formula
Spread cost = Spread (pips) × Pip value of the position
All-in cost (pips) = Spread (pips) + Commission ÷ Pip valuePip size is 0.0001 for most pairs and 0.01 for JPY pairs. Pip value is the money one pip is worth on your position in your account currency. A pipette is a tenth of a pip.
The cost as a percentage divides the trade cost by the value of the position in your account currency. It is tiny per trade, which is exactly why it is easy to overlook.
A worked example
EUR/USD is quoted at 1.085 bid and 1.08512 ask. The spread is 1.2 pips, or 12.0 pipettes. On 1 lot a pip is worth $10.00, so the spread costs $12.00 per trade, or 0.0111% of the position.
At 20 trades a month, that is $240.00 a month and $2,880.00 a year, paid whether the trades win or lose.
Spread plus commission: comparing account types
Brokers price trading in two main ways. A standard account builds its fee into a wider spread. An ECN or raw-spread account passes on a tighter market spread and charges a separate commission. To compare them, convert the commission into pips and add it to the spread.
| Account | Spread | Commission per lot | All-in cost | Cost per trade (1 lot) |
|---|---|---|---|---|
| Standard (example) | 1.2 pips | none | 1.2 pips | $12.00 |
| Raw spread + commission | 0.2 pips | $7 round turn | 0.9 pips | $9.00 |
| Standard during news | 5 pips | none | 5 pips | $50.00 |
With these example prices the raw-spread account is cheaper, but the gap depends on the spreads you actually receive. Advertised minimums such as “from 0.0 pips” describe the best moments of the day, not the average.
Fixed and variable spreads
Variable (floating) spreads move with the market. They are tightest in the most liquid hours, when the London and New York sessions overlap, and widen when liquidity drops. Fixed spreads stay the same in normal conditions, which makes costs predictable, but they are usually wider than the typical variable spread, and brokers may still widen them or requote in fast markets.
Spreads tend to widen in predictable moments: around major releases such as US payrolls and central bank decisions, during the daily rollover near 5 p.m. New York time when liquidity is thin, and at the Sunday open. If a EUR/USD spread of 1.2 pips widens to 5 pips for a few seconds after a big release, a $12.00 cost becomes $50.00 on one lot.
Cross pairs and exotic pairs cost more than the majors. A 1.5-pip spread on EUR/GBP costs $19.05 per lot in a dollar account with GBP/USD at 1.27, because a pip on that pair is worth more than $10.
What this calculator does not include
- Slippage. Market orders can fill at a worse price than the quote, especially during news.
- Swap. Positions held past the daily rollover earn or pay overnight interest. The forex swap calculator estimates it.
- Changing spreads. The monthly figure assumes every trade pays the spread you entered.
- Conversion fees. Some brokers charge a margin on converting profits and losses into your account currency.