Education6 min read
Trading Costs Explained: Spread, Commission, Swap, and Slippage
Every cost eats into your profit. Learn all the costs of CFD trading and how to minimise them. Spreads, swaps and slippage — the all-in cost math per trade.
The Four Costs
- Spread: Difference between bid and ask — the main cost
- Commission: Per-trade fee on ECN accounts
- Swap: Overnight financing charge
- Slippage: Difference between expected and actual fill price
Minimising Costs
- Trade major pairs during London/NY overlap for tightest spreads
- Use limit orders to avoid slippage
- Close positions before triple swap (Wednesday)
- Compare standard vs ECN accounts for your volume
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70-80% of retail investor accounts lose money when trading CFDs. Backtesting does not guarantee future results. Always consider whether you can afford the potential loss of your capital.