Commission

Commission is a direct fee paid to a broker for facilitating a trade. Unlike spread, which is built into the price, commission is an explicit charge, often per lot or per million traded. It applies to both opening and closing a position and can vary based on account type or trading volume.

For retail traders, commissions are a direct trading cost, impacting profitability alongside spread and swap fees. A common commission might be $3.50 per standard lot ($100,000 notional) per side, meaning $7.00 for a round trip. These costs accumulate, particularly for frequent traders or those using smaller stop losses, requiring careful consideration in trade planning.