The Three Costs: Spread, Commission and Swap
Your strategy has to clear three separate costs before it earns anything. Most beginners only ever see the spread.
A trade has to clear three separate costs before it earns a single cent. Most beginners can name one of them. The other two quietly erode accounts for years without ever being noticed.
Knowing all three does not make them disappear. It lets you choose the account type and holding period that suit your strategy, instead of fighting a cost structure you did not know you had.
Spread: the cost you cannot avoid
The spread is the gap between the buy price and the sell price. You buy at the higher price and sell at the lower one, so you begin every trade slightly down. It is charged on entry and again on exit.
Spreads are not fixed. They widen when liquidity thins — around major news releases, at market open, and outside the main session for that instrument. A pair that costs one pip at London midday might cost eight pips during a thin Asian session.
Market Sessions
Monitor global market hours and overlap periods to identify peak liquidity and volatility.
Commission: the raw-spread trade-off
Many brokers offer raw or zero spreads in exchange for a fixed commission per lot per side. For a scalper trading frequently, this is usually cheaper. For someone holding a handful of trades a month, a wider spread with no commission often works out better.
The only way to know is to calculate your expected round-trip cost per trade and multiply by how often you trade. There is no universally better option, only a better option for your frequency and size.
Swap: the cost of time
Swap, also called financing or rollover, is charged for holding a leveraged position overnight. It exists because you are controlling exposure someone else is funding for you.
The rate depends on the interest rate differential between the two currencies, the direction of your position, and a broker markup. Long positions in higher-yielding currencies against lower-yielding ones may receive a small credit; most other configurations pay.
The triple-swap day
Positions held overnight on one specific weekday are charged three times the normal swap, to cover the weekend when the market is closed but the exposure still exists. For most brokers this is Wednesday, though it varies by instrument.
A swing trader holding through that night pays three days of financing for one calendar day. Over a year of holding positions, this is a meaningful and entirely avoidable cost if you plan around it.
Illustrative round-trip cost on one standard lot of EUR/USD held five nights
| Cost | Typical charge | Round-trip total |
|---|---|---|
| Spread | 1.0 pip each way | $20.00 |
| Commission | $3.50 per side | $7.00 |
| Swap | Charged per night held | Varies by rate and direction |
| Triple-swap day | 3× normal on one night | Included above |
Key takeaways
- Every CFD trade pays spread, commission, and swap — three separate costs
- Spreads widen in thin liquidity, which is when beginners most want to trade
- Raw spread plus commission suits high frequency; standard suits occasional trading
- One weekday charges triple swap to cover the weekend — plan longer holds around it
- Spread is paid on entry and again on exit, every single trade
- Commission is charged per lot on raw-spread accounts
- Swap accrues for as long as a position stays open overnight
- Swap is charged triple on one day of the week to cover the weekend
Holding a long-term CFD position for weeks without accounting for daily financing costs.
Reading is not verification
Take the concept you just read and turn it into explicit rules, then test it. That is the only way to know whether it actually works.
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