Spread Only vs Raw Pricing

Written by Dominic Walsh · Published 17 Aug 2026

The spread only vs raw pricing choice is the first real decision you make when opening an account, and brokers explain it badly. One model hides the cost inside the price, the other charges it separately and quotes a tighter market. Neither is generous. This guide covers what each model actually costs, how to compare them on a single number, and which one suits the way you trade.

How the two models work

A broker has to be paid. The models differ only in where that payment shows up.

Spread-only accounts quote a price with the broker’s markup already inside it. You might see EURUSD at 1.5 pips when the underlying market is quoting 0.3, and the difference is the fee. No commission line appears on your statement.

Raw pricing accounts pass through the interbank quote almost untouched, so EURUSD might show 0.1 pips, and charge a separate commission per lot traded. Brokers also call these ECN, Zero or Pro accounts.

The names vary and the structure does not. One cost is embedded, the other is itemised.

Comparing spread only vs raw pricing on one number

To compare them you need both costs expressed in the same unit. Convert commission into pips.

Commission is usually quoted per side per lot, so a “7 dollars per lot round turn” account charges 3.50 on entry and 3.50 on exit. On a standard lot of a dollar-quoted pair, one pip is 10 dollars, so 7 dollars is 0.7 pips.

Total cost = raw spread + (round-turn commission ÷ pip value per lot)

Run that calculation before you open anything. A raw account with high commission can cost more than a competitive spread-only account, and the marketing will not tell you which.

Where the difference actually bites

The cost gap is usually a fraction of a pip. Whether that matters depends entirely on your holding period.

A scalper taking 5-pip targets pays the spread on every trade. At half a pip of difference across two hundred trades a month, the gap is a hundred pips, which is the difference between a working system and a losing one.

A swing trader holding for 200 pips over several days pays it once. Half a pip against a 200-pip move is a quarter of one percent, and the choice barely registers.

Our 1-minute scalping strategy guide covers why cost dominates at short holding periods, and bid ask spread calculation covers the arithmetic.

What the comparison misses

Three factors matter more than the headline numbers, and none of them appear in a comparison table.

Advertised spreads are averages. A broker quoting “from 0.1 pips” is describing the best moment on the most liquid pair. During a news release or the Asian session, both models widen. Ask for typical figures rather than minimums.

Only majors get the tight numbers. The advertised spread applies to EURUSD. Crosses, exotics and gold cost multiples of it under either model, as covered in our low spread pairs guide.

Execution beats pricing. A broker with tight quotes and frequent requotes or slippage costs more than the numbers suggest. Fill quality is harder to compare and matters more.

Test both on a live account with small size rather than on demo. Demo servers fill perfectly and tell you nothing about real execution.

Which one to choose

The decision reduces to two questions.

How long do you hold? Under an hour, take raw pricing and check the commission carefully. Days or weeks, take whichever broker you trust more, because the cost difference is noise against your target.

Do you run automated systems? Expert Advisors trading frequently accumulate cost fast, and raw pricing usually wins. Backtest with realistic commission rather than the platform default, or your results will flatter the system.

One argument gets repeated and does not survive scrutiny: that raw accounts give you “real” market access while spread-only brokers trade against you. Both models are quoting you a price with a markup, and the difference is presentation. Regulation and execution quality tell you far more about a broker than the pricing model does.

Whatever you pick, size positions from your stop rather than from the cost. Our position sizing calculator handles it.

Common mistakes

Four repeat. Comparing a raw spread against a spread-only quote without adding commission tops the list, which makes raw look far cheaper than it is. Trusting advertised minimums comes second, since they describe the best moment on one pair. Third, traders choose raw pricing for a strategy that holds trades for days. Fourth, they backtest an EA with zero commission and wonder why live results differ.

Where to go next

Cost is one input among several. Read bid ask spread calculation for the arithmetic, then forex low spread pairs for where costs are lowest. If you scalp, the 1-minute scalping strategy guide shows how much cost matters, and the position sizing calculator covers the sizing. For further reading, Investopedia explains ECN brokers at Investopedia, and the electronic communication network article on Wikipedia covers the underlying plumbing.

FAQ

What is the difference between spread-only and raw pricing?

Spread-only accounts build the broker’s fee into the quoted price. Raw accounts quote a tighter market and charge a separate commission per lot, so the cost is itemised rather than hidden.

Which one is cheaper?

Convert the commission into pips and add it to the raw spread, then compare that total against the spread-only quote. A raw account with high commission can easily cost more.

How do I convert commission into pips?

Divide the round-turn commission by the pip value per lot. On a standard lot of a dollar-quoted pair one pip is 10 dollars, so 7 dollars round turn equals 0.7 pips.

Does raw pricing mean I trade in the real market?

Not necessarily. Both models quote you a price with a markup, and the difference is where that markup appears. Regulation and execution quality matter more.

Which model suits scalping?

Raw pricing usually, because cost is paid on every trade and short targets leave no room for a wide spread. Check the commission before assuming it wins.

Do advertised spreads reflect what I pay?

Rarely. They describe the tightest moment on the most liquid pair, and both models widen during news and thin hours. Trading involves risk, results are not guaranteed, and past performance is not indicative of future results.