Costs & Charges
Discover the Key to Successful Trading:
Mastering Commissions, Swap Charges, and Associated Costs with Eurotrader!
Gain Insight into Transparent Pricing and Optimize Your Trading Strategy for Maximum Profitability and Confidence.
Commissions:
At Eurotrader, we believe in transparent pricing and strive to offer competitive commission rates to our traders. Our commission structure may vary depending
on the type of account you hold and the financial instruments you trade. Generally, commissions are charged on a per-trade basis and are calculated as a fixed fee per lot traded.
Example: Let’s say you’re trading EUR/USD with a commission of $7 per lot traded. If you execute a trade of 1 lot on EUR/USD, the commission charged would be $ 1 * 7 = US$7
Calculating Costs:
To calculate the total cost of a trade, you would add up the commissions, swap charges (if applicable), and spread costs. It’s essential to consider these factors when evaluating the profitability of your trades and managing your risk effectively.
Example: Total Cost = Commissions + Swap Charges + Spread Costs
Total Cost = $7 (Commissions) + $6.58 (Swap Charges) + $2 (Spread Costs) = $15.58
Swap cost is variable, and it would depend largely on the days that the trade is being kept open.
The breakdown of the cost in this particular case would be:
Charge
US$
% of Total
Commission
7
45%
Spread
2.00
13%
Swap
6.58
42%
Total Cost
15.58
100%
Swap Charges (Overnight Financing):
Swap charges, also known as overnight financing or
rollover fees, are incurred when positions are held overnight. These charges are applied to reflect the interest rate differential between the two currencies being traded plus any markup that is applied by the broker. Swap charges may be debited or credited to your account depending on the direction of your position and the prevailing interest rates.
Example: Suppose you’re holding a long position on
EUR/USD, and the interest rate for the euro is higher than that of the US dollar. In this case, you may receive a credit to your account to reflect the interest rate differential.
If a client buys 1 Lot EURUSD and keeps it overnight, then the SWAP charge can be calculated as follow:
Swap = 1 (Lot) * Swap Long * Nights
Swap = 1 * -6.58 * 1 = -6.58 US$
For a full list of Swaps click here
Spread Cost:
In addition to commissions and swap charges, traders should be aware of other costs associated with trading, such as spreads, slippage, and funding fees. Spreads refer to the difference between the buy (ask) and sell (bid) prices of a financial instrument and represent the primary source of revenue for brokers like Eurotrader.
Example: Let’s consider you’re trading EUR/USD on an account that you get charged a commission of US$ 7 per lot and the spread upon opening the position was 0.2 pips so that the buy price is 1.09145 and the sell price is 1.09143, (1.09145 – 1.0943 = 0.00002), equivalent to $2 for a standard lot.
