Risk warning. CFDs and leveraged FX carry a high risk of rapid loss and a majority of retail investor accounts lose money. General information, not financial advice.
The standard advice on account types is that raw spread plus commission is cheaper for active traders and a commission-free standard account is simpler for everyone else. It is repeated everywhere, it is roughly right, and it is completely useless, because it never tells you where the line is.
So let us find the line. Not with a broker's numbers we cannot verify, but with the formula, so you can run it on whichever two accounts you are actually choosing between. If you want the conceptual version first, spread vs commission covers what each cost is; this piece is only about the crossover.
The two structures, stated precisely
A standard account quotes a wider spread and charges no separate commission. The broker's fee is the markup baked into that spread. One number, no arithmetic at the point of trade.
A raw or ECN account quotes a spread much closer to the underlying market and charges a commission per lot, typically levied on both the opening and the closing side. Two numbers, and the second one is easy to forget.
There is a third structure worth naming because it confuses the comparison: a fixed spread account, where the spread does not float at all. Predictable, and the trade-off sits in what happens when the market is not normal. ECN vs market maker brokers explains why the execution model behind each of these differs.
The formula
Put both accounts into the same unit: cost per standard lot, round turn. Round turn means open plus close, because that is what a completed trade actually costs.
Standard account cost = spread in pips x pip value per lot
Raw account cost = raw spread in pips x pip value per lot + total commission per lot for both sides
On a pair quoted to four decimal places against the US dollar, the pip value on a standard lot is $10 — that is arithmetic, not a broker claim: 0.0001 x 100,000 units = $10. So on the majors the formula simplifies neatly.
Standard cost per lot = 10 x standard spread
Raw cost per lot = 10 x raw spread + round-turn commission
Set them equal and the crossover falls out.
The raw account wins when: 10 x (standard spread − raw spread) is greater than the round-turn commission.
Read that carefully, because it says something the usual advice does not. The comparison contains no volume term at all. Both sides scale linearly with the number of lots you trade. If raw is cheaper for one lot, it is cheaper for a thousand. If it is more expensive for one lot, more lots will not rescue it.
So why does everyone say raw is for high-volume traders?
Because the statement is true for a different reason than the one implied.
Volume does not change which account is cheaper. It changes how much the difference matters. If the gap is a couple of dollars per lot, a trader doing two lots a month is arguing about the price of a coffee and should pick on simplicity. A trader doing two hundred lots a month is arguing about a real sum and should do the arithmetic properly.
There is also a second, genuine volume effect: brokers frequently apply commission tiers, so the per-lot commission itself falls as monthly volume rises. That does move the crossover — but it moves it because the commission changed, not because volume changed the formula. If your broker publishes tiers, run the sum at the tier you will realistically reach, not the one on the marketing page.
Worked example, with the numbers left blank on purpose
Fill these in from your own broker's two account pages and the answer takes ninety seconds.
| Step | Standard account | Raw account |
|---|---|---|
| Typical spread on your instrument, in pips | A | B |
| Pip value per standard lot | $10 on a USD-quoted major | $10 on a USD-quoted major |
| Spread cost per lot | 10 x A | 10 x B |
| Commission, opening side | none | C |
| Commission, closing side | none | C |
| Total per standard lot, round turn | 10 x A | 10 x B + 2C |
Whichever total is smaller is the cheaper account for that instrument, at any size you trade. Two rules for filling it in honestly.
Use the typical or average spread, never the "from" figure. A "from 0.0 pips" headline describes the best moment of the day on the most liquid pair; it is not what you will pay on average, and comparing an average against a minimum guarantees the wrong answer.
Use the spread at the hours you actually trade. Both spreads widen outside the deep-liquidity window, and they do not widen by the same amount. Forex trading sessions and liquidity covers when those windows fall.
The three things the formula leaves out
This is where a clean model meets an untidy market, and all three of these can be larger than the difference you just calculated.
Slippage. The formula assumes you get the quoted price. You often do not. A broker with a tighter advertised spread and consistently worse fills can be the more expensive venue overall, and no comparison table will show it. Measuring it yourself is the only method that works — slippage in trading sets out how.
Swaps. Hold a position overnight and financing applies, on both account types, and on multi-day holds it routinely dwarfs the entry cost entirely. Forex swap and rollover fees explained covers the mechanics.
Minimum commission per ticket. If the raw account has a floor per trade, very small positions pay it in full and the per-lot arithmetic above breaks down completely. This matters enormously on a small balance, which is why it appears again in what is a nano lot in forex.
The counter-argument for the standard account
Raw pricing has become the default recommendation, and there are two situations where that is wrong.
If you trade rarely and in small size, the difference is negligible and a single number is genuinely easier to reason about. Cost transparency has a value of its own when you are still learning; a spread you can see on the chart is easier to internalise than a commission that appears on the statement afterwards.
And on instruments where the standard account's markup is small — typically the most heavily traded majors — a flat commission can simply be larger than the markup it replaces. The formula above will tell you when that is the case. It is not rare.
The bottom line
Ignore "raw is for active traders" and run the sum. Both structures scale linearly, so the crossover is a per-lot comparison, not a monthly volume target — and the honest answer is often that on your instruments, at your size, the difference is too small to be the thing you choose a broker on. When that happens, choose on regulation and execution instead: how to choose a forex broker and lowest spread forex accounts both start there.
Risk Warning
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 51-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
This article is general information, not financial advice. No spread or commission figure is quoted for any broker here; run the formula on the current figures published on your broker's own account pages.
Frequently Asked Questions
Is a raw spread account always cheaper than a standard account?
No. A raw account is cheaper only when the spread saving per lot exceeds the round-turn commission per lot. If the standard account's spread markup is smaller than the commission, the standard account wins at every volume. The comparison is per lot, not per month, which is why 'raw is for high-volume traders' is a rule of thumb rather than arithmetic.
How do I calculate the break-even between the two accounts?
Convert both accounts to a cost per standard lot round turn. For the standard account that is the typical spread in pips multiplied by the pip value. For the raw account it is the raw spread multiplied by the pip value, plus the total commission for opening and closing. Whichever total is smaller is cheaper for you at any volume, because both costs scale linearly with lots traded.
Does the answer change by instrument?
Substantially. Commission is usually charged as a flat amount per lot regardless of instrument, while the standard account's spread markup varies enormously between a heavily traded major and a thin exotic or an index. The account that is cheaper on one instrument can be the more expensive one on another, so run the comparison on the instruments you actually trade.
