The short version
- Every trade has at least two costs: the spread and a fee or commission, usually charged on both the buy and the sell.
- Leveraged positions add a nightly financing charge; crypto adds deposit, withdrawal and network fees.
- Add all layers for a full round trip and convert them to money before comparing platforms.
Trading fees explained properly means following one trade from the moment money leaves your bank to the moment it returns. Along the way there can be half a dozen separate charges, some shown clearly, some folded into the price. None is large on its own, which is why they are easy to ignore, and together they decide how far a price must move before you are even back where you started.
The spread: the cost built into the price
Every market quotes a buying price (ask) and a lower selling price (bid). The difference is the spread. If you buy and immediately sell, you lose it. On busy forex pairs the spread may be a fraction of a pip; on less traded pairs, small-company shares and minor tokens it can be many times wider. "Zero commission" platforms often earn most of their income here, so a wide spread can cost more than a visible fee.
Commissions and trading fees
Share brokers may charge a flat fee or a percentage per order. Forex brokers offering very narrow spreads usually add a commission per lot. Crypto platforms typically charge a percentage of each trade, with two rates:
- Maker fee: charged when your order waits in the order book, such as a limit order below the current price. Often lower.
- Taker fee: charged when your order fills immediately against existing orders, such as a market order. Often higher.
Remember the fee applies on the way in and on the way out. The crypto profit calculator applies it on both sides for exactly this reason.
Financing: the cost of holding overnight
Leveraged positions, including forex, CFDs and crypto perpetual futures, carry financing charges. In forex, positions held past 17:00 New York time are charged or credited a swap based on the interest-rate difference between the two currencies plus the provider's markup, and a triple charge is usually applied on Wednesday to cover the weekend. Crypto perpetual futures use a funding rate exchanged between long and short holders at set intervals, which can swing from small to large when the market is one-sided.
Money in, money out
- Deposit fees: card payments and instant methods may cost a percentage; bank transfers are often cheaper but slower.
- Currency conversion: depositing in one currency and trading in another adds a conversion margin, sometimes on both legs.
- Withdrawal fees: a flat charge per withdrawal, or a network fee when you move crypto off a platform.
- Network fees: paid to the blockchain rather than the platform, and they vary with congestion. USDT on Ethereum, for example, can cost noticeably more to move at busy times than on some other networks. See what USDT is.
The quiet ones
- Inactivity fees after months without trading.
- Account or custody fees charged monthly or yearly by some share platforms.
- Slippage: the gap between the price you expected and the price you got, common in fast markets and on thin order books.
- Data or platform fees for premium charts or real-time prices.
Worked example 1: a crypto round trip
All fee rates here are illustrative. You deposit $1,000 by card with a 2% charge, buy Bitcoin with a 0.2% fee, the price does not move, you sell with a 0.2% fee and withdraw with a $2 fee.
| Step | Calculation | Balance |
|---|---|---|
| Card deposit | $1,000 × (1 − 0.02) | $980.00 |
| Buy fee | $980 × (1 − 0.002) | $978.04 |
| Sell fee | $978.04 × (1 − 0.002) | $976.08 |
| Withdrawal | $976.08 − $2 | $974.08 |
The total cost is about $25.92, or roughly 2.6%, before any spread. To finish with your original $1,000 the price would have to rise by about 2.7%. The card deposit, not the trading fee, is the biggest item.
Worked example 2: a forex position held for three nights
Again illustrative. You buy 1 standard lot of EUR/USD with a 1.2-pip spread and hold it from Monday to Thursday. The swap on your side is −$7 per night, tripled on Wednesday.
- Spread: 1.2 pips × $10 = $12.
- Swaps: Monday 1 + Tuesday 1 + Wednesday 3 = 5 charges × $7 = $35.
- Total: $47, or 4.7 pips of price movement needed just to break even.
Use the pip calculator to convert this for other pairs and sizes.
How trading more often multiplies costs
Small percentages grow quickly with frequency. In an illustrative case, someone trading a $500 balance in and out of a coin with a 0.2% fee on each side pays about $1.00 on the buy and $1.00 on the sell (slightly less on the sell, since the fee has already reduced the balance), roughly $2.00 per round trip. Fifty round trips in a month cost about $99.90, close to 20% of the balance, even if every trade broke even on price. Spreads would add more. This is why many beginners who trade frequently find that fees, rather than bad calls, take most of their money.
How to compare fees fairly
- Pick a realistic trade: your usual size, holding time and deposit method.
- Write down every layer above that applies.
- Convert each into money and add them up for the full round trip.
- Repeat for each platform on your list, then weigh the result alongside the safety checks in how to choose a broker.
Beginner questions
Why did I lose money on a trade when the price did not change?
Because you paid the spread and fees on both sides. A trade has to move in your favour by at least the total cost before it shows a profit.
Are 'zero fee' platforms really free?
Rarely. They usually earn through wider spreads, currency conversion or other charges. Compare the full cost of a round trip rather than the headline.
Is a maker fee always lower than a taker fee?
Often, but not always. Check the platform's fee schedule; some charge the same rate or offer discounts linked to trading volume.
Sources
- European Securities and Markets Authority, CFD product intervention measures (cost disclosure)
- UK Financial Conduct Authority, guidance on costs and charges disclosure