Spread, swap, and the cost a ticket shows

A closed ticket is a small account of one round trip. Somewhere on it, if the firm prints a full row, you can find the price at which the position opened, the price at which it closed, a commission if one was charged, and a swap if the position was held across the financing cut. The spread is the cost that often never gets its own column. It is already inside the open price, the close price, or both, because each of those prices was taken from one side of a two-sided quote. Learning to read the cost means separating three different things that people mash into the word "fees": the spread you can measure from bid and ask, the commission that appears as its own number, and the swap that appears when time passes. None of the three is a signal. All three are facts a statement can confirm or fail to confirm.

The spread is the ask minus the bid at a moment in time, measured in the quote currency of the pair. If a sample board, invented so the subtraction is obvious and not taken from any live market, shows a bid of 1.2500 and an ask of 1.2502, the spread is 0.0002, which is two pips where a pip is the fourth decimal place. That gap is the distance between the price for selling the base and the price for buying it. Open a buy and the position starts from the ask. The bid, the price you would need to sell at in that same instant, is already lower. The platform's floating result can therefore show a loss the moment the position exists, even though the mid price has not moved. The loss is the spread, translated into money by the size of the position. Close the position at once, on the bid, and the round trip has paid that gap. The ticket may never label the amount "spread." You recover it by comparing the fill to the other side of the quote you wrote down, or by noticing that a trade opened and closed at the same mid still shows a negative result equal to the gap times the units.

Spreads are not a fixed property of a pair. They widen when the book is thin, around the daily open, through some scheduled announcements, and whenever the firm decides its displayed price should stand farther from the other side. They can narrow when many prices are competing and the platform is passing them through. A figure in a marketing page, "spreads from" a small number, describes a floor the firm likes to mention. Your ticket describes the gap on the orders you actually sent. Those two documents answer different questions. If you care what a strategy of frequent opens and closes would have paid, the relevant number is the spread on each of your fills, not the smallest spread the homepage has ever displayed at a quiet hour. Write the bid and the ask at the time of the click when you can. A later average spread published for the day will not reconstruct the cost of a single order that went through during a wide minute.

Commission is the cost that does get a column. Some accounts charge a spread and no commission. Some charge a tighter spread and a commission per unit, often per side, so a round trip pays the commission twice. Some fold a fee into a slightly worse fill and also show a small commission. The only reliable reading is the one on your own statement legend. Look at a single closed row and ask whether the profit figure already has the commission removed. If the profit is a gross price difference and the commission sits beside it, you must include the commission when you add up the economic result. If the profit is already net, adding the commission again will double-count and make a decent row look worse than the cash movement. The statement's summary for the period is the referee. Take one day on which you know there was exactly one round trip, and see whether the change in balance equals the profit column alone or the profit column plus the commission column. That experiment, done once with a pen, teaches you the house style better than a glossary.

Swap, also called rollover or overnight financing, is the line that appears because a spot position is not settled at the end of the day in the way a textbook spot trade would be. The firm rolls the position forward and applies a rate linked, often loosely, to the interest-rate difference between the two currencies, plus or minus a markup the contract allows. The sign depends on which currency you are notionally long and which you are short. One direction can be credited while the other is charged, and both directions can be charged if the markup is wide enough. The amount is assessed when the position is open at the firm's cut-off time, which you should read in the contract rather than assume is midnight where you live. A position closed ten minutes before the cut-off and reopened ten minutes after may avoid the swap. A position held across it will show the line, sometimes on the next statement day. The swap is not a dividend you earned for being clever. It is a financing entry. A positive number is still just a credit on that row, not evidence that the position was a good idea.

Many retail contracts charge a triple swap on one weekday to cover the weekend, because the spot convention settles two business days forward and the Wednesday roll, on a lot of desks, carries Friday through Sunday. Some firms use a different day. Some products, including certain cash contracts and some "fee" accounts, replace the triple day with a daily administration charge that does not follow the interest-rate story at all. The label on the column may still say swap. Read the contract's financing page and then test it: hold a small position across the suspected day on a record you can afford to treat as a test, or inspect an old statement that already contains that day, and see whether the swap is about three times the neighboring weekdays. If it is, you have learned the firm's calendar. If it is not, you have learned that the glossary word and the cash movement are not the same object. Either result belongs in your notes next to the account type, because a different account at the same firm can use a different schedule.

There are smaller lines that disguise themselves as one of the big three. A conversion fee when the profit is translated into the account currency, an inactivity charge, a deposit charge, a withdrawal charge, and a dividend-style adjustment on a related product can all move the balance without sitting in the spread. A statement that only shows "profit" is hiding the mix. Export the detailed history if the platform allows it, and keep the column headers. When a balance changes by an amount you cannot tie to a closed trade, search for a row whose type is "balance," "credit," "fee," or "correction." Those rows are part of the cost of the account even when they are not part of the cost of a particular pair. Ignoring them makes a journal of trades look better or worse than the cash, which means the journal has stopped being a record of the account and has become a record of a story about the account.

You can put the visible costs of one round trip on a single sheet without forecasting anything. Write the units. Write the open fill and the close fill. Write the bid and ask at the open if you saved them, and at the close if you saved those too. Compute the price difference in the direction of the position, multiply by the units, and convert into the account currency the way the statement did. Then subtract commission, and add the swap with its own sign. The result should land on the profit the statement shows for that ticket, within a rounding penny. If it does not, one of the inputs is wrong, or the profit column is net of something you treated as separate, or a conversion rate was applied that you did not copy. The mismatch is useful. It tells you which part of the cost you have not yet learned to see. It does not tell you whether the next trip will look like this one. Costs vary with the hour, the size, and the firm's settings, and a single reconciled ticket is a sample of those settings on that day.

Over a month the three costs behave differently, which is another reason to keep them apart. Spread and commission arrive because orders were sent. They scale, roughly, with how often and how large you deal, and they are paid whether the price then moves for you or against you. Swap arrives because positions were held across a cut-off. A person who opens and closes inside a few minutes may have almost no swap and a large pile of spread. A person who holds for weeks may have modest spread and a swap line that dominates. Adding them into one "cost" for a boast or a complaint throws away the mechanism. A record that keeps three columns can be read later by someone who was not at the screen. A record that says "fees were high" cannot. High compared with what, on which days, for which reason, is the question a statement is equipped to answer if the columns are allowed to stay separate.

Nothing on this page is an offer to deal. This site is not a broker, it does not quote a market, and it does not charge a spread or a swap of its own because it does not open positions for anyone. The costs described here are the sort that show up on a real ticket, at a real firm, against real cash. A price move against a position that is large relative to the money on deposit can wipe that deposit, whether the spread was narrow and the swap was a credit or not. Seeing the cost clearly is a way to read what already happened. It is not a method for making the next price cooperate.

This page is general information. It is not a policy, a diagnosis, a school place, or a trade.