Is commission based or spread only pricing better for active traders?
Verdict
- For active FX traders, commission-based pricing usually works out cheaper: at Pepperstone, our top pick, a round-trip lot of EUR/USD costs about $8 on Razor (0.1 pips average plus $7 commission) against $11 on the spread-only Standard account.
- On cTrader the Razor round trip falls to about $7, because commission there is $3.00 per side.
- Spread-only pricing still has a place: Pepperstone's spread betting account charges no commission and, by its wording, profits are exempt from capital gains tax, which can outweigh a slightly wider spread for UK traders.
- Compare like with like: brokers that publish only 'from' spreads, such as IG's 0.6 points on EUR/USD, are quoting a minimum, not the average you will usually pay.
Spread-only accounts fold the broker's charge into a wider price; commission accounts show a raw spread and bill a fixed amount per lot. Which is cheaper depends on how much you trade and what you trade. Here is the break-even maths at Pepperstone and the cases where spread-only pricing still wins in the UK.
The verdict for active traders: commission, on Pepperstone Razor
Pepperstone publishes both models side by side, which makes the comparison clean. Its Standard account has no commission; the cost is a 1-point mark-up inside the FX spread, giving a published EUR/USD average of 1.1 pips. Razor shows the raw spread, averaging 0.1 pips, and charges $3.50 per lot per side on MT5, TradingView and its own platform, or $3.00 on cTrader. On one standard lot of EUR/USD at $10 a pip, Standard costs $11 per round trip and Razor $8, or $7 on cTrader. Every round trip on Razor saves $3 to $4.
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Break-even by volume
At these averages Razor is cheaper from the very first lot, so on EUR/USD there is no volume threshold to reach. The gap is similar on other majors, where Standard's mark-up stays around one pip: GBP/USD averages 1.2 pips on Standard against 0.2 on Razor, and USD/JPY 1.3 against 0.3.
| Round-trip lots a month | Standard (1.1 pips) | Razor on MT5 or TradingView | Razor on cTrader |
|---|---|---|---|
| 5 | $55 | $40 | $35 |
| 20 | $220 | $160 | $140 |
| 100 | $1,100 | $800 | $700 |
When spread-only pricing makes more sense
- You spread bet: Pepperstone's spread bets carry no commission, and it says profits are exempt from capital gains tax, though that depends on your circumstances.
- You trade small: at 0.1 lots, Razor costs about $0.80 per EUR/USD round trip against $1.10 on Standard; cheaper, but by only 30 cents.
- You mainly trade shares: Pepperstone's Standard account is commission-free except on shares, so share CFDs carry commission whichever account you choose.
- You want one number per trade: with spread-only pricing, the whole cost is visible in the quote.
How other UK brokers price
Capital.com, our second choice in the UK, shows only live spreads on its forex page, so we cannot put a fair number on it here. Note that 'from' figures are minimums: CMC's 0.5 and IG's 0.6 cannot be set directly against Pepperstone's averages.
| Broker and account | Model | Published EUR/USD figure |
|---|---|---|
| Pepperstone Razor | Raw spread + commission | 0.1 pips average + $3.50 per side |
| Pepperstone Standard | Spread only | 1.1 pips average |
| CMC Markets FX Active | Raw spread + commission | From 0.0 pips + 0.0025% per transaction |
| CMC Markets standard account | Spread only | From 0.5 pips |
| IG | Spread only | From 0.6 points |
Sources
Prices as published by each broker.
Does commission make Razor more expensive for beginners?
Not at Pepperstone's published averages: even at 0.1 lots, Razor costs about $0.80 per EUR/USD round trip against $1.10 on Standard. Beginners often still prefer Standard because the whole cost sits in the spread they can see.
Is commission charged in pounds on a GBP account?
Yes. Pepperstone quotes Razor commission from £2.25 per lot per side for GBP accounts; its UK base currencies are GBP, USD, EUR and CHF.
Do spread bets carry commission at Pepperstone?
No. Spread bets are priced in pounds per point with the cost in the spread. Pepperstone publishes a EUR/USD minimum of 0.5 points on spread bets, against 0.0 on Razor and 1 on Standard.
Trading CFDs and spread bets on margin carries a high risk of rapid losses, because leverage magnifies every price move. Lower costs do not make a strategy profitable. Nothing here is investment or tax advice; fees are as published by each broker at the time of writing and may change.