Raw spread vs Standard account: compare the true cost per lot

This is a straight contest: Raw-spread account vs Standard account at the same broker. We compare the costs you pay to open and close a trade — the true entry/exit cost — using the same currency pair and the same lot size. Criteria used here: spread in pips, commission (round‑turn) per standard lot, lot size, and pip value for the pair. Secondary considerations you should keep in mind: execution quality (slippage), overnight swap/financing, deposit/withdrawal fees, base-currency conversion costs, and whether commission is prorated by lot size. I’ll show the general cost formulas, then a worked example table with clear assumptions. I won’t declare a single winner — whether Raw or Standard is better depends on the exact spreads, commission schedule, and your trade size and frequency. Read the criteria above and compare them to your trading style before choosing.

Use these variable names when you collect numbers from your broker: spread_pips = the spread in pips quoted for the pair; pip_value_per_lot = value of 1 pip for 1 standard lot in your account currency (e.g., EUR/USD ≈ $10 per 1.00 lot); L = lot size (standard lots, e.g., 0.1, 1, 5); commission_per_lot = broker commission charged per 1.00 standard lot (round‑turn). General formulas (round‑turn cost):

• Standard account (no commission):

  cost_standard = spread_pips × pip_value_per_lot × L

• Raw account (lower spread + commission):

  cost_raw = spread_pips_raw × pip_value_per_lot × L + commission_per_lot × L

Notes and assumptions: many brokers prorate commission by lot size, so commission_per_lot × L is common; confirm whether your broker charges a fixed minimum per trade or charges per side. Pip value changes with pair and account currency; always compute pip_value_per_lot for the pair (or use the broker’s published pip calculator). These formulas give you round‑turn cost (open + close) in account currency.

We’ll run one clear, hypothetical fight so you can copy the method. Assumptions (example only):

• Pair: EUR/USD, pip_value_per_lot = $10 per 1.00 lot (common reference).
• Standard account: spread_pips_standard = 1.2 pips, commission_per_lot_standard = $0.
• Raw account: spread_pips_raw = 0.1 pips, commission_per_lot_raw = $6 (round‑turn per 1.00 lot, prorated by lot size).

Apply the formulas: cost_standard = 1.2 × $10 × L; cost_raw = 0.1 × $10 × L + $6 × L.

That simplifies to: cost_standard = $12 × L; cost_raw = ($1 + $6) × L = $7 × L.

Because both spread and commission are proportional to L in this example, the raw account saves a constant percentage across sizes. Below is a worked table for common trade sizes (0.1, 0.5, 1, 5 lots). These are illustrative; replace the numbers with your broker's exact spread and commission to get your true cost.

Lot size (L)	Standard cost (1.2 pips)	Raw cost (0.1 pips + $6/lot)	Savings (Standard − Raw)
0.10	$1.20	$0.70	$0.50 (≈41.7%)
0.50	$6.00	$3.50	$2.50 (≈41.7%)
1.00	$12.00	$7.00	$5.00 (≈41.7%)
5.00	$60.00	$35.00	$25.00 (≈41.7%)

How to read this table: for the example numbers, a raw account costs $7 per 1.00 lot round‑turn versus $12 on the standard account. The raw account becomes more attractive as lot size and volume grow because the lower spread dominates even after paying commission. Important caveats: if your broker’s commission is a fixed minimum per trade (not prorated), small trades may flip the math toward the standard account. Also execution and slippage can change realized cost — a tiny quoted spread is worthless if execution routinely requotes or slips badly.

Raw‑spread account likely suits you if:

• You trade medium to large lot sizes (≥0.5–1.0 lot typical) or you have high monthly volume. The lower spread compounds into bigger absolute savings.
• Your strategy is directional intraday or position trading where wider spreads would otherwise eat expected edge.
• You want the tightest displayed spreads for scalping and are comfortable paying per‑lot commissions (and your broker prorates commissions logically).

Standard account likely suits you if:

• You trade tiny lot sizes (micro lots) or make few trades; zero commission and a slightly larger spread can be cheaper for low-volume traders.
• You prefer simple pricing with no per‑lot billing, or you trade pairs where pip value is lower and commissions would dominate small trades.
• You want simplicity and you are sensitive to minimum commissions or minimum ticket fees per trade.

Don’t forget non‑cost factors: margin requirements, hedging or scalping rules, execution latency, and regulatory protections. If you care about broker integrity, check regulator warning lists or registration (see sources).

Actionable checklist to pick between raw and standard at your broker:

1. Get the broker’s exact published spread (typical and raw) for the specific pair and the exact commission schedule, including minimum per trade and whether it’s prorated.
2. Calculate pip_value_per_lot for the pair in your account currency (or use the broker’s pip calculator).
3. Plug numbers into the formulas: cost_standard = spread_standard × pip_value × L; cost_raw = spread_raw × pip_value × L + commission_per_lot × L. Run for the lot sizes you trade most.
4. Add expected slippage and any swap/overnight financing into your per‑trade cost if you hold overnight.
5. If you trade high frequency (many small trades), multiply per‑trade cost by number of trades to get monthly cost; if you trade less often, compare per‑trade values.
6. Demo both account types if available — check execution quality, slippage and platform features.

Final note: there’s no universal winner. Use the formulas and checklist above with your broker’s real numbers and your trading profile to choose the best account for you.