Open an account at almost any broker and you will be asked to choose between two account types. The names vary enormously, but the structure is nearly universal across the industry.
Most traders pick based on the label. Beginners assume the simpler-sounding one is for them, and experienced traders assume the one with “raw” or “zero” in the name must be cheaper because it sounds more professional.
Both assumptions are sometimes right and sometimes wrong, and the actual answer is a short piece of arithmetic that almost nobody does.
(Disclosure: I am the founder and CEO of TabTrade, which offers both account types, as does nearly every broker. The figures below are illustrative industry ranges rather than any specific broker’s pricing, including ours.)
The two models
The standard account charges you through the spread. There is no separate commission line. The broker takes the pricing it receives and applies a markup, typically in the region of one pip on major currency pairs, and that markup is the broker’s revenue.
This is the same mechanism as changing money at an airport. The rate to buy and the rate to sell are different, and that difference is the cost of the transaction. Nobody hands you an invoice, but you paid.
The raw or commission account removes most of the markup and charges separately. Spreads sit at or near the underlying market, frequently close to zero on the majors during liquid sessions, and the broker charges a volume-based commission instead. Industry pricing typically falls somewhere between five and ten dollars per standard lot, round turn.
You will see this account called raw, zero, ECN, DMA, razor, edge and a dozen other things. The naming is marketing. The mechanism is the same.
One thing worth clearing up immediately: when a broker advertises “spreads from 0.0 pips”, this is the account they are describing. It is not a claim about the standard account, and as I have written about at length, it is a best-case figure rather than a typical one.
The arithmetic
On a standard lot of EUR/USD, one pip is worth ten dollars. That single fact makes the comparison straightforward.
| Standard account | Raw / commission account | |
|---|---|---|
| Typical EUR/USD spread | around 1.0 pip | around 0.1 pip |
| Commission | none | around $7 per lot, round turn |
| Cost per 1.0 lot, round turn | about $10.00 | about $8.00 |
| Cost per 0.1 lot, round turn | about $1.00 | about $0.80 |
Illustrative figures using mid-range industry pricing, not a specific broker’s rates.
Two things fall out of this that are worth stating plainly.
The raw account is usually cheaper on liquid majors. Under these fairly typical numbers it costs about twenty percent less per round turn. That gap compounds quickly if you trade frequently.
Commission scales with size, so it does not penalise small traders. This is the most common misconception I encounter. Commission is charged per lot, so a tenth of a lot attracts a tenth of the commission. The proportional cost is identical whether you trade 0.01 lots or 10 lots.
Where it flips
The raw account does not always win, and the crossover depends on two things.
How wide the standard markup actually is. If a broker’s standard account markup is closer to half a pip rather than a full pip, the standard account costs about five dollars per lot and comfortably beats a seven dollar commission.
What you are trading. Commission is generally a flat rate per lot regardless of instrument, while spread markup varies enormously across instruments. On minors and exotics, where raw spreads are naturally much wider, the fixed commission is added on top of an already wide spread. The relative advantage narrows and can reverse.
The rule that actually works: calculate the all-in cost per round turn, on the specific instruments you trade, at both account types, and compare the two numbers. It takes a few minutes and it is the only comparison that matters.
So which should you choose?
The honest answer is that if the arithmetic favours the raw account for your instruments, it favours it regardless of your experience level. The idea that raw accounts are reserved for professionals is a marketing convention, not a mathematical one.
That said, there are real reasons to choose the standard account.
Simplicity has value. One number to think about rather than two. If you are still building a process and want fewer variables while you learn, that is a legitimate trade-off.
Holding period changes the stakes. If you enter a position intending to hold it for weeks, a two dollar difference in entry cost is noise against the move you are trying to capture. If you are in and out several times a day, that same two dollars is the difference between a viable strategy and an unviable one.
Testing a broker. A standard account is a perfectly good way to evaluate a broker’s platform, execution and support before committing to anything.
For anyone running algorithmic strategies, high-frequency approaches or anything that turns over meaningful volume, the raw account is almost always the correct choice, and the difference is not marginal over a year of trading.
The costs neither model shows you
Both account types quote you the cost of opening and closing a position. Neither quotes you the cost of running an account, and those costs are real.
Swap and financing charges apply to positions held overnight and vary substantially between brokers. For a carry strategy or any longer-horizon approach, these can dwarf the difference between account types entirely.
Currency conversion on deposits, withdrawals or on profits in a currency other than your account denomination.
Inactivity fees, which are common and which people routinely forget about.
Withdrawal fees, which vary by method and destination.
Individually these are small line items. Across the life of an account they add up in a way that rarely appears in any comparison table, including the ones I write.
Frequently Asked Questions
Is a raw or ECN account always cheaper than a standard account?
No. On liquid major pairs it usually is, because the commission is typically less than a full pip of markup. On minors, exotics and some commodities, where raw spreads are naturally wider, a flat commission added on top can make the standard account competitive or cheaper. Work it out per instrument.
Does commission make raw accounts unsuitable for small position sizes?
No. Commission is charged per lot, so it scales proportionally with your position size. A 0.01 lot trade attracts one hundredth of the per-lot commission, meaning the proportional cost is the same at any size.
What does “spreads from 0.0 pips” actually refer to?
It refers to the raw or commission account, and it describes the narrowest spread the broker has recorded rather than a typical one. It also excludes the commission, which is a real cost of the trade. Compare average spreads plus commission if you want a figure that reflects reality.
How do I compare total trading costs between two brokers?
Add the average spread cost and the commission for one round turn on the instruments you actually trade, at the account type you would actually use, then compare the totals. After that, check swap rates if you hold overnight, and check the account fee schedule for inactivity, withdrawal and conversion charges.
