This article describes commissions that may be charged by a brokerage.
When executing customers trades, a brokerage can be compensated in several ways. The one of the ways is to charge a fixed commission. The commission depends on an instrument traded.
FX Instruments
The commission can be charged for:
Each position opened.
Each order placed.
Commission Per Position
The commission can be paid at one of the following events:
Any Deal (half of the commission is paid when a position is opened, another half - when a position is closed).
Open Position (full amount of the commission is paid when a position is opened).
Close Position (full amount of the commission is paid when a position is closed).
The commission can be charged per each unit of the base currency of the instrument bought/sold. The commission is expressed in the account denomination currency.
Commission Calculation Example Hide
The commission rate for EUR/USD is $0.00008 any deal.
Open 10K EUR/USD.
The charge to open a position would be calculated as follows:
Open Comm = 0.00008/2(commission) x 10000(amount of the position) = $0.40
Close 10K EUR/USD
The charge to close the position would be calculated as follows:
Close Comm = 0.00008/2(commission) x 10000(amount of the position) = $0.40
The total charge would be calculated as follows:
Total Comm = 0.40(open commission) + 0.40(close commission) = $0.80The commission can be charged per entire trade. The commission is expressed in the account denomination currency.
Commission Calculation Example Hide
The commission rate for EUR/USD is $0.8 any deal.
Open 10K EUR/USD.
The charge to open a position would be calculated as follows:
Open Comm = 0.8/2(commission) = $0.40
Close 10K EUR/USD
The charge to close the position would be calculated as follows:
Close Comm = 0.8/2(commission) = $0.40
The total charge would be calculated as follows:
Total Comm = 0.40(open commission) + 0.40(close commission) = $0.80
Commission Per Order
The commission can be charged per each order executed. In the case of a partial fill, the commission is paid only once, when the first portion of the order is executed. The commission is expressed account denomination currency.
Commission Calculation Example Hide
The commission rate for EUR/USD is $0.40.
Open 10K EUR/USD.
The order is executed in two portions.
The charge would be as follows:
First Portion Comm = $0.40
Second Portion Comm = 0.00
[Total Comm = $0.40CFD Instruments
The commission types that can be charged are the same as described above. The only one difference is the commission is charged per each contract bought/sold instead of a unit of the base currency of the instrument. The commission is expressed in the account denomination currency.
Commission Per Position
Commission Calculation Example Hide
The commission rate for one contract of GER30 is $0.20 any deal.
Open 5 GER30.
The charge to open a position would be calculated as follows:
Open Comm = 0.20/2(commission) x 5(number of contracts) = $0.50
Close 5 GER30
The charge to close the position would be calculated as follows:
Close Comm = 0.20/2(commission) x 5(number of lots) = $0.50
The total charge would be calculated as follows:
Total Comm = 0.50(open commission) + 0.50(close commission) = $1.00Commission Per Order
Commission Calculation Example Hide
The commission rate for one contract of GER30 is $0.20.
Open 10 GER30.
The order is executed completely.
The charge would be as follows:
Comm = $0.20
Total Comm = $0.20CFD Shares Instruments
The commission can be charged for:
Each position opened.
Each order placed.
Commission Per Position
Any Deal (half of the commission is paid when a position is opened, another half - when a position is closed).
Open Position (full amount of the commission is paid when a position is opened).
Close Position (full amount of the commission is paid when a position is closed).
The amount of the commission can be calculated as a percentage of the notional transaction value. The minimum charge is applicable. If the calculated amount is less than minimum charge, the minimum charge will be subtracted from the account.
Commission Calculation Example Hide
The commission rate for one share of BNP.fr/EUR is 0.20% any deal.
The account denomination currency is USD.
The minimum charge is EUR 24.
The EUR/USD rate is 1,1025.
Open 1000 BNP.fr/EUR @ 42.
The charge to open a position would be calculated as follows:
Open Comm = 0.20/100*2(commission) x 1000 (number of shares) x 42 (open rate) x 1 (contract multiplier) x 1.1025 (conversion rate)= $46.31
The minimum charge is calculated as follows:
Min Charge = 24/2 (minimum charge) x 1.1025 (conversion rate) = $13.23
Close 10 BNP.fr/EUR @ 45.00.
The charge to close a position would be calculated as follows:
Close Comm = 0.20/100*2(commission) x 1000 (number of shares) x 45 (close rate) x 1 (contract multiplier) x 1.1025 (conversion rate)= $49.61
The minimum charge is calculated as follows:
Min Charge = 24/2 (minimum charge) x 1.1025 (conversion rate) = $13.23
Total Comm = 46.31(open commission) + 49.61(close commission) = $95.92The commission can be charged per each share bought/sold. The commission is expressed in the instrument settlement currency and it is converted into the account denomination currency.
Commission Calculation Example Hide
The commission rate for one share of T.us/USD is $0.02 any deal.
The account denomination currency is USD.
The minimum charge is USD 30.
Open 100 T.us/USD.
The charge to open a position would be calculated as follows:
Open Comm = 0.02/2(commission) x 100 (number of shares) x 1 (conversion rate)= $1
The minimum charge is calculated as follows:
Min Charge = 30/2 (minimum charge) x 1 (conversion rate) = $15
Close 100 T.us/USD.
The charge to close a position would be calculated as follows:
Close Comm = 0.02/2(commission) x 100 (number of shares) x 1 (conversion rate)= $1
The minimum charge is calculated as follows:
Min Charge = 30/2 (minimum charge) x 1 (conversion rate) = $15
Total Comm = 15 (open commission) + 15 (close commission) = $30.00Commission Per Order
The commission can be charged per each order executed. In the case of a partial fill, the commission is paid only once, when the first portion of the order is executed. The commission is expressed in the instrument settlement currency and it is converted into the account denomination currency.
Commission Calculation Example Hide
The commission rate for one order of BNP.fr/EUR is EUR 12.
The account denomination currency is USD.
The EUR/USD rate is 1,1025.
Open 1000 BNP.fr/EUR.
The order is executed completely.
The charge would be as follows:
Comm = 12 (minimum charge) x 1.1025 (conversion rate) = $13.23
Total Comm = $13.23