Quick answer
Spread cost per trade = spread in pips × pip value per lot × lots. A 0.6 pip spread on one standard lot of EUR/USD costs about 6 USD per round trip; a 1.5 pip spread costs 15 USD. Over 40 trades a month, that difference alone is 360 USD. The calculator below shows your own numbers per trade, per month and per year.
Investing in financial products involves risk. Losses may exceed the value of your original investment.
The spread is paid on every single trade, win or lose, the moment the position opens. Commissions are visible on the statement; the spread hides inside the fill price, which is why active traders often underestimate it. Multiply it out and a one pip difference becomes a four figure annual cost for anyone trading daily.
Worked example
A day trader places 40 trades a month at one standard lot. On a 1.5 pip spread the monthly cost is 1.5 × 10 × 1 × 40 = 600 USD. On a 0.6 pip spread, the same activity costs 240 USD. Same strategy, same trades, 4,320 USD a year apart. On Volity, spreads on the Standard account start at 0.6 pips on EUR/USD.
FAQ
Is the spread charged on open and close separately?
No. The full spread is effectively paid at entry: the position opens at the ask and is valued at the bid, so it starts the spread’s width underwater. Closing adds no second spread charge.
Why does the spread widen at certain times?
Spreads track liquidity. They are tightest during the London and New York overlap and widen during rollover (5 p.m. New York time), at the Sunday open and around high-impact news, when fewer prices compete in the book.
Do tight spreads matter for long-term traders?
Less than for scalpers. At a handful of trades per month, a one pip difference costs tens of dollars, not thousands. Position traders should weight swap rates and execution quality more heavily than the raw spread.
Pair this with the pip value calculator and the position size calculator, or compare account types on the charges and fees page.
