BRYME Money · Broker & platform checks
Forex spreads, pips and lots: what one trade can cost
Convert a quoted spread to money before comparing any fee claim.
A forex quote shows the price of one base-currency unit in a quote currency. In EUR/USD, EUR is the base and USD the quote. The bid is what a dealer or venue may pay for a base unit; the ask is what it may charge to sell one. The difference is the spread, one cost of crossing the market.
Pips and lots are unit conversions
For a typical EUR/USD quote, one pip is 0.0001 USD per EUR. A standard lot commonly represents 100,000 base units and a mini lot 10,000, subject to the contract specification. On 10,000 EUR, one 0.0001 move is 10,000 × 0.0001 = $1 in USD quote currency. A quote with JPY on the right commonly uses 0.01 per pip; the resulting pip value is in JPY, not automatically in the account's currency. Check the actual instrument's pip convention and contract size.
Worked example: the spread in dollars
Imagine EUR/USD bid 1.10000, ask 1.10012. The gap is 0.00012, or 1.2 pips. On 10,000 EUR, the difference between paying the ask and immediately receiving the unchanged bid is 10,000 × 0.00012 = $1.20. If a hypothetical account also charges $0.70 per 10,000 units on entry and $0.70 on exit, this example's flat-quote round trip costs $1.20 + $1.40 = $2.60, before slippage, overnight funding or currency conversion. We are not quoting a live dealer, market rate or suitable trade.
| Inputs | Conversion | Result |
|---|---|---|
| Bid 1.10000; ask 1.10012 | (ask − bid) ÷ 0.0001 | 1.2 pips |
| 10,000 EUR base units | 10,000 × 0.0001 USD | $1 per pip |
| 1.2 pips × $1 | Spread cost at unchanged quote | $1.20 |
Spread-only versus commission accounts
A wider quoted spread with no explicit commission can be more expensive than a tighter spread with a commission, or the reverse; compare the all-in round trip at the same size and hour. Do not compare the minimum spread from a calm session with an actual quote from a fast session. The SEC warns that 'commission-free' retail FX can still carry an embedded dealer markup in the spread. ASIC MoneySmart also notes that spread, commissions and financing costs can add up.
What the pip calculation does not tell you
A pip value derived in USD does not become the same number in GBP, CAD or AUD; convert using the relevant account-currency rate and the broker's terms. A stop quoted 25 pips away does not promise a 25-pip loss if price gaps or liquidity disappears. Swaps or financing can change a position held overnight, and execution at a different quote changes the cost. For a planning estimate, use the position-size calculator only with an understood account currency and product contract, then add costs and slippage separately. The full cost guide covers the other lines of the bill.
Sources and further reading
Links were reviewed 2026-09-24. Regulatory permissions, firm status and product terms can change; use the current official register before acting.
General information, not financial advice. Everything on BRYME Money is educational. Trading forex, crypto and derivatives involves substantial risk of loss and is not suitable for everyone. Past performance — including any published research — does not guarantee future results. Never trade money you cannot afford to lose.