A raw spread account is a forex account type that passes through spreads close to the true interbank rate, often near 0.0 pips on major pairs, in exchange for a separate fixed commission charged per lot. This structure appeals to traders who want maximum pricing transparency, as this FXM680 guide explains.
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What Is A Raw Spread Account? An In-Depth Overview
A raw spread account connects a trader’s orders directly to liquidity providers with minimal markup, resulting in spreads that can sit at or near 0.0 pips during liquid market hours. Because the broker earns little to nothing from the spread itself, it charges a separate, fixed commission per lot traded to generate revenue.
This structure is common among ECN-style brokers and is popular with traders who want to see execution pricing that closely mirrors the real interbank market, rather than a marked-up quote.
Raw spread accounts typically require understanding two numbers instead of one: the near-zero spread and the separate commission, both of which must be added together to know the true cost of a trade.
Why Raw Spread Accounts Matter for Traders
Scalpers and high-frequency traders benefit most from raw spread accounts, since even small spread reductions compound significantly across dozens of daily trades. The commission, while an added line item, is usually predictable and easy to calculate in advance.
Raw spread accounts also appeal to traders who value pricing transparency, since the true cost of liquidity is visible rather than hidden inside a widened quote.
Detailed Analysis of Raw Spread Account Features
Spread Behavior
Spreads on a raw account fluctuate with real market liquidity, meaning they can widen during high volatility or low-liquidity hours, unlike a standard account’s more stable, pre-marked-up spread.
Commission Structure
Commission is usually quoted per side, per lot, meaning a full round-turn trade, opening and closing, incurs the commission twice, once on entry and once on exit.
Execution Speed
Raw spread accounts are frequently paired with faster market execution models, since they are built for traders sensitive to both cost and speed, such as scalpers.
| Feature | Raw Spread Account | Standard Account |
|---|---|---|
| Typical Spread | Near 0.0 pips | 1-2 pips or more |
| Commission | Fixed fee per lot | None, built into spread |
| Best Suited For | Scalpers, high-frequency traders | Occasional, longer-term traders |
Step-by-Step Guide to Evaluating a Raw Spread Account
- Check the broker’s average raw spread for the currency pairs most relevant to the intended strategy.
- Note the exact commission rate per lot, per side, published in the account specifications.
- Add spread cost and commission together to calculate the true round-turn cost per lot.
- Compare this combined figure against a standard account’s spread-only cost for the same pair.
- Confirm the account supports the intended trading style, since raw accounts favor fast, frequent execution.
Common Pitfalls to Avoid
A common pitfall is focusing only on the advertised near-zero spread while overlooking the commission, which can make the account more expensive than expected for lower-frequency traders. Another is assuming raw spread accounts are always cheaper, when for traders placing very few, large trades a standard account can sometimes work out similarly.
Frequently Asked Questions
Is a raw spread account better than a standard account? It depends on trading frequency; raw spread accounts tend to favor high-frequency traders while standard accounts can suit lower-frequency traders equally well.
Do raw spread accounts always charge commission? Yes, the near-zero spread model is specifically built around a separate commission replacing the markup a standard account bakes into its spread.
Can spreads on a raw account ever widen significantly? Yes, during major news events or low-liquidity hours, raw spreads can widen noticeably before returning to normal levels.
Continue Your Forex Learning Journey with FXM680
Raw spread accounts are one of several account structures available to forex traders, each suited to different trading styles. The next lessons in this Academy compare standard and ECN account types in the same detail.
Disclaimer: The content provided on this page is for informational and educational purposes only. Trading financial markets involves significant risk. Consult with a certified financial advisor before making any investment decisions.
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Compare Every Forex Account Type
Raw spread is just one account structure among several. Explore the full FXM680 Forex Academy to compare standard, ECN, and raw spread accounts side by side.