Is commission-based or spread-only pricing better for active traders?
Verdict
- For active traders, commission-based pricing is usually cheaper: at Pepperstone, our pick, a round-turn lot of EUR/USD costs about $7 on Razor via cTrader or $8 via MT5, against $11 on the spread-only Standard account.
- At 50 round-turn lots a month, that gap is $150 to $200; at 200 lots, $600 to $800.
- FP Markets shows the same pattern: Raw at 0.11 pips plus US$3 per side (about $7.10) against Standard at 1.21 pips (about $12.10).
- Spread-only still makes sense where no commission is charged on either account, and on gold, where Pepperstone's two accounts come out about level.
On forex majors, commission-based (raw spread) pricing wins for almost anyone who trades regularly, because the commission is smaller than the extra spread a spread-only account builds in. Pepperstone states that its Standard account has no commission and instead carries a 1-point mark-up inside the FX spread. Here is what that means in dollars as your volume grows.
The Pepperstone numbers
Razor publishes a 0.1-pip EUR/USD average and charges commission: USD 3.00 per side on cTrader, USD 3.50 on MT5, TradingView and Pepperstone's app, or AUD 3.50 on MT5 for AUD accounts. Standard publishes a 1.1-pip average and charges nothing else on FX. At $10 a pip on a standard lot, Razor costs $7 or $8 per round trip and Standard $11. Razor also opens up MT4 and TradingView, which Standard does not offer in Australia.
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What the difference adds up to
The saving scales with volume, not with account size: a trader doing 0.1-lot trades saves a tenth as much per trade, but the same share of cost.
| Round-turn lots per month | Razor on cTrader | Razor on MT5 | Standard |
|---|---|---|---|
| 10 | $70 | $80 | $110 |
| 50 | $350 | $400 | $550 |
| 200 | $1,400 | $1,600 | $2,200 |
When spread-only pricing is the better choice
- Index and crypto CFDs: Pepperstone charges no commission on either account, though Razor's index and crypto spreads are equal or tighter.
- Gold: 0.12 plus commission on Razor against 0.19 on Standard comes out about level on a 100-ounce trade.
- Simplicity: one cost to watch makes it easier to judge each trade while you learn.
- Strategies built around a fixed spread in their rules.
The same test at other ASIC-licensed brokers
| Broker | Commission-based | Spread-only |
|---|---|---|
| Pepperstone | Razor: $7 (cTrader) to $8 (MT5) | Standard: $11 |
| FP Markets | Raw: 0.11 avg + $6 = $7.10 | Standard: 1.21 avg = $12.10 |
| IC Markets | Raw Spread: 0.01 avg + $7 = $7.10 | Standard: from 0.8 pips (a minimum, not an average) |
| Vantage | Raw ECN: from 0.0 + $6 | Standard STP: from 1.4 pips |
Sources
Terms as each broker publishes them on its own site.
How many trades does it take for Razor to be cheaper?
One. On EUR/USD at published averages, every round-turn lot is $3 to $4 cheaper on Razor than on Standard.
Does commission apply to index CFDs at Pepperstone?
No. Index CFDs carry no commission on either account.
Is spread-only pricing better for scalpers?
No. Scalpers trade the most often, so the per-trade saving of commission-based pricing adds up fastest for them.
Lower costs do not make leveraged CFD trading safe; you can still lose money rapidly. Figures are broker-published averages or minimums and change over time. Read the PDS and TMD. Not investment advice.