Spread and Fees

Trading usually involves two main fees that traders pay brokers as a fee for using their services:

1. Spread

2. Overnight fees or Swaps

 

Spread

Spread is the difference between each asset's bid price and ask price. Spread values ​​are expressed in points or pips to describe the difference in asset prices. Where 10 pips are equal to 1 pip.

 

 

For example, imagine when you want to exchange currency in a bank. Each currency has a different bid price and ask price displayed,

such as EURUSD.

The bid price is 1.08207 USD.

The ask price is 1.08217 USD.

 

The difference between this price is the spread, and the spread difference is 0.010, or 1 pip.

This spread is the fee that brokers charge traders. These are costs that traders accept in order to trade financial assets or when opening a position.

 

The formula for calculating the cost required to open a position:

Spread(lot) = ask price - bid price x contract size

 

For example, for 1 lot of EURUSD, you will pay a fee equal to:

Spread (1 lot) = 1.08217 - 1.08207 x 100,000

Spread value (1 lot) = 0.00010 x 100,000

Spread (1 lot) = 10 USD

 

And if you trade 0.1 lot of EURUSD, you will pay a fee equal to:

Spread (0.1 lot) = 1.08217 - 1.08207 x 10,000

Spread value (0.1 lot) = 0.00010 x 10,000

Spread value (0.1 lot) = 1 USD.

 

Overnight fees or Swaps

Overnight fees, or swaps, are fees that traders must pay to brokers if they hold assets overnight.

This swap applies to CFD assets that must be using more than 1 leverage or assets that are held in a sell position.  The swap rate varies for each asset.

 

There are 2 types of swaps:

1. Daily swap

This is the fee that you have to pay to the broker every day. It will be charged every day at 10:00 PM (GMT+00:00).

 

2. Weekly swap

A fee that must be paid to the broker triple the daily amount. Because the market is closed, it can be divided into:

•  Collect triple the fee every Friday. For assets such as commodities, indices, stocks, cryptocurrencies, and ETFs, as these assets are closed every Saturday and Sunday.
• Collect triple the fee every Wednesday. for currency assets this is because the market is closed on Thursdays and Fridays. Therefore, no financial transactions can be performed on that day.

 

At iUX.com, we do not charge any overnight fees or free swaps from clients who open new accounts of any type. If the client mostly opens positions overnight, this may be considered for swap fees, following the terms and policies of the liquidity provider.