Commission

A commission is a fixed fee your broker charges per trade, typically calculated on a per-lot basis. On a raw spread or ECN account, you might pay $3-7 per standard lot per side (meaning you pay when opening and again when closing). The commission model tends to be more transparent than markup-based pricing.

Commission-based accounts usually come with tighter spreads because the broker isn't padding the spread to make their money. If you add the commission to the spread, the total cost might be similar to a commission-free account with wider spreads — but the transparency is better, and for active traders, raw spreads with low commissions typically work out cheaper.

Not all commissions are created equal. Some brokers charge per lot, others per trade, and some use a percentage of the trade value. Always calculate the total round-trip cost (commission for opening plus closing, plus the spread) to compare brokers accurately. A broker advertising "zero commissions" with a 2-pip spread on EUR/USD isn't necessarily cheaper than one charging $6 per lot with a 0.1-pip spread.