Forex Trading Costs Explained: Spread-Only vs. Commission-Based Accounts

Key Points:

• Forex pricing models typically fall into two categories: spread-only and commission-based—each offering distinct strengths depending on a trader’s goals for cost visibility, execution reliability, and strategic fit.
• When comparing pricing models, traders should consider how spreads, commissions, and execution quality behave in real‑world conditions—particularly during periods of elevated volatility—and how those dynamics align with their trading strategy and cost‑management preferences.
• tastyfx offers both spread-only and commission-based pricing models. 
• Zero+, the commission-based account at tastyfx, gives traders access to raw spreads from 0.0 pips, paired with a transparent $5 per-lot commission per side ($10 round trip).

Whether you’re trading casually or executing dozens of trades a day, one thing remains constant in the world of forex trading: every trade has a cost. And the structure of that cost—how it’s applied, displayed, and managed—can shape everything from your fills to your long-term performance.

Most forex brokers offer two core pricing models:

• Spread-only: where trading costs are embedded in the bid–ask spread.
• Commission-based: where traders access tighter raw spreads and pay a fixed fee per trade.

Today, we’ll outline how these pricing models work, lay out some key differences between the two, and highlight how some of the most prominent features of each align with different trading approaches. We’ll also examine tastyfx Zero+, a commission-based account built for traders who value tight spreads, predictable costs, and execution clarity.

Spread-Only vs. Commission-Based Pricing: What’s the Difference?

In a spread-only model, trading costs are built directly into the bid–ask spread. There’s no separate commission, and the total cost of a trade depends on market conditions and other variables—such as liquidity and volatility. This makes it a simple, all-in pricing structure that prioritizes ease of use, but that means the ultimate cost of each trade can be more variable.

Commission-based pricing, on the other hand, is designed to separate out trading costs for greater clarity. These accounts typically offer access to raw, tighter spreads—sometimes as low as 0.0 pips—while charging a fixed commission per trade (usually per standard lot). This approach lets traders see exactly what they’re paying, which can help with cost analysis and performance tracking.

In short, spread-only pricing accounts bundle trading costs into the spread, while commission-based accounts separate them out—offering greater transparency into trade costs and more consistency in execution expenses.

Unpacking the 1.0 Pip Rule of Thumb

One of the simplest ways to compare forex pricing models is by looking at all-in trading cost per standard lot. That means combining the spread with any commission charged on the trade.

In forex trading, a pip (short for “percentage in point”) is the standard unit of measurement for currency price movement. For most currency pairs, one pip equals 0.0001 (or one one-hundredth of a percent).

The bid-ask spread—the difference between the bid (buy) and ask (sell) price—is also measured in pips. For example, if EUR/USD is quoted with a bid of 1.1000 and an ask of 1.1002, the spread is 2 pips. This spread represents the built-in cost of entering and exiting a trade in a spread-only pricing model.

At tastyfx, Zero+ combines spreads from 0.0 pips with a $5 per-side commission ($10 round-trip per standard lot), which approximates to around 1.0 pip in total cost. When comparing to spread-only accounts, this creates a rough break-even threshold at 1.0 pip spreads:

• Below 1.0 pip, spread-only pricing may offer a cost advantage
• Around 1.0 pip, the difference between the two is less pronounced
• Above 1.0 pip, commission-based pricing may offer a cost advantage

Spreads tend to stay tight during calm market conditions—especially on major pairs like EUR/USD or USD/JPY—but can widen significantly when volatility increases. In a spread-only account, that widening directly increases your transaction cost, since the full fee is embedded in the spread. In a commission-based model, spreads can also widen during volatility, but the fixed commission keeps total costs more predictable.

How Currency Pair Selection Can Impact Trading Costs

Beyond the cost structure itself, it’s important to remember that pricing efficiency varies significantly by currency pair.

Some pairs naturally carry tighter average spreads, while others tend to be wider due to lower liquidity or higher volatility. This can influence whether a spread-only or commission-based model ends up being more cost-effective—especially for traders focused on specific pairs or regions.

• EUR/USD (~0.8 pips): As one of the most liquid and tightly traded pairs, EUR/USD often favors spread-only accounts—particularly for traders who place fewer trades or hold positions longer. At sub-1.0 pip spreads, the built-in cost can be relatively low and consistent.
• AUD/USD (~1.0 pip): Sitting near the break-even point, AUD/USD highlights where the cost difference between pricing models begins to shift. For traders placing frequent intraday trades, commission-based pricing often becomes more cost-effective—especially as fixed fees remain stable while spread-only costs add up over time.
• NZD/USD (~1.6 pips): NZD/USD provides an example where commission-based pricing may offer a cost advantage. With wider-than-average baseline spreads, trading this pair in a spread-only account may result in higher execution costs—especially for active or intraday strategies. With this pair, a commission-based account may help to reduce cost volatility and improve pricing consistency, particularly when spreads widen.

Wider, more variable spreads aren’t limited to NZD/USD—they’re also common in commodity-linked currencies like AUD, CAD, and NZD, as well as non-USD crosses such as EUR/GBP and GBP/JPY. These pairs often experience thinner liquidity and choppier price action, especially outside peak trading hours.

In such conditions, spread-only pricing can lead to higher—and less predictable—trading costs. For traders active in these markets, a commission-based account may therefore offer greater consistency, and potentially lower total costs, depending on one’s strategic approach and execution goals.

Why Cost Transparency Matters—and How Commission-Based Models Deliver It

While headline cost is an important factor when comparing the two account types, structural differences in how those costs are applied can be just as important—especially as your trading strategy matures. Spread-only and commission-based models don’t just differ in amount, but also in how clearly and consistently they reveal trading costs.

Commission-based accounts (like tastyfx Zero+) separate the market price from the transaction cost, offering:

• Transparency: Raw spreads show the actual market price, while fixed commissions clearly outline your trading cost—so it’s easier to separate broker fees from market movement.
• Cost control: Because commissions stay fixed, your costs remain more stable even when spreads widen due to volatility or low liquidity—helping to mitigate unexpected spikes in trading expenses.
• Tracking and Assessment: With transaction fees listed separately from the bid–ask spread, it’s easier to review trade outcomes, evaluate strategy performance, and understand what’s driving your results.

Spread-only accounts, by contrast, bundle fees into the bid–ask spread. That simplicity can be appealing—but it also obscures what part of the price is market-driven versus broker-imposed, particularly when spreads widen unexpectedly.

How Commission-Based and Spread-Only Pricing Models Behave in Practice

The way trading costs are applied can have a big impact on your bottom line—especially when markets get volatile. In a spread-only model, transaction costs are embedded directly into the bid–ask spread. That keeps things simple on the surface, but it also means those costs can vary significantly depending on market conditions—sometimes without much notice.

For example, a trader might typically pay a 1.4-pip spread on EUR/USD under normal conditions, only to see that spread widen to 3.0 pips or more during volatile or illiquid sessions. That hidden cost increase happens automatically and isn’t always visible until after execution.

Commission-based accounts, by contrast, separate the execution fee from the spread—offering greater transparency and, often, more consistent cost control. That said, raw spreads can still widen during periods of market volatility. However, the impact is typically more contained.

For example, in a fast-moving session, the EUR/USD raw spread might expand from 0.2 to 0.5 pips, depending on liquidity. This would increase the overall transaction cost, but because the per-lot commission remains fixed, the total cost remains more predictable—and usually less volatile than in a spread-only account where the entire cost is embedded in the variable spread.

At tastyfx, traders can choose between a standard spread-only account or a commission-based account via Zero+. Zero+ offers raw spreads starting from 0.0 pips, paired with a flat $5 commission per standard lot per side ($10 round-trip). Mini and micro lots are charged proportionally, keeping the cost structure transparent and scalable across trade sizes.

Ultimately, understanding how each pricing model behaves in real-world conditions—particularly during periods of heightened volatility—is essential. Your choice of account type should reflect how often you trade, how sensitive your strategy is to slippage and execution costs, and how much pricing transparency matters to you.

Choosing Between Commission-Based and Spread-Only Accounts

Choosing a pricing model starts with understanding how you trade. From that perspective, it’s less about which structure is “better” and more about which one best-suits your style—your strategy, trading frequency, and the pairs you focus on.

Spread-only accounts offer simplicity, with costs bundled directly into the bid–ask spread. Commission-based models, on the other hand, provide more transparency and consistency—particularly when spreads widen in fast or illiquid markets.

Ultimately, the choice comes down to understanding which trade-offs matter most to you

Spread-Only Accounts

Spread-only accounts may appeal to traders who prioritize simplicity and trade less frequently—especially those that focus on major pairs that exhibit robust liquidity.

Spread-only pricing may therefore suit traders who:

• Typically hold positions for several hours or days, rather than trading intraday
• Focus on highly liquid pairs like EUR/USD or USD/JPY, where spreads tend to stay tight
• Prefer the simplicity of bundled pricing without tracking separate commissions
• Are less impacted by short-term spread fluctuations or execution variability

Commission-Based Accounts

Commission-based pricing may appeal to traders who prioritize cost transparency and execution control—especially in fast-moving or volatile markets where spreads can widen unexpectedly.

This model often aligns with strategies that involve:

• Higher trade frequency, including intraday and short-duration setups
• Trading a wider mix of pairs, such as minors and non-USD crosses
• A need for stable pricing around high-impact news or off-peak sessions
• A preference for a fixed, auditable breakdown of transaction costs

The tastyfx Zero+ account is built around these priorities, offering raw spreads from 0.0 pips and a flat $5 per standard lot per side. Pricing scales proportionally with mini and micro lots—ensuring a consistent cost structure regardless of trade size.

For scalpers, intraday traders, and those operating around key data releases, Zero+ delivers stable and predictable pricing that supports precision execution and performance tracking.

The Bottom Line

Commission-based and spread pricing aren’t necessarily mutually exclusive—they’re distinct tools designed for different trading behaviors, and in some cases, they can complement one another.

Spread-only accounts focus on simplicity, offering all-in pricing that appeals to traders with a lower-frequency approach or a tighter focus on major pairs. Commission-based accounts, like Zero+, emphasize transparency, consistent costs, and raw spreads—features that can benefit more active traders who require tighter execution and a clear breakdown of costs.

Some traders opt to use both account types side by side—leveraging the simplicity of spread-only pricing for longer-horizon trades, while turning to commission-based pricing for higher-frequency or cost-sensitive setups.

Ultimately, the right choice depends on how you trade, what you trade, and when. Each structure offers distinct advantages—it’s about finding the right fit for your style and priorities.