Basics
Commission
A fee charged by brokers for executing trades.
Full Definition
Commission is a fee charged by forex brokers for opening and/or closing trades. Some brokers charge commission with tight spreads (ECN/STP model), while others offer commission-free trading with wider spreads. Understanding total trading costs requires considering both spread and commission.
Example
An ECN broker charges $7 commission per standard lot round-trip, but offers 0.1 pip spreads. A market maker offers 0 commission but 1.5 pip spreads.
Related Terms
Apply Your Knowledge
Put this concept into practice with our free trading tools.