Trading mechanics
Raw spread
A pricing model where the spread is passed through without a markup and the cost is charged as an explicit commission instead. It separates the price you trade from the fee you pay.
GFN’s figure
GFN charges commission separately at $3.50 per side, $7 per lot round turn, so the cost of trading is an explicit line rather than something folded into the price.
In detail
Raw spread,explained
Raw pricing is easier to audit because the two components are visible separately, and it usually produces a lower total cost for frequent traders than a marked-up spread does.
Comparing firms means adding both parts together. A tight spread with a high commission and a wide spread with none can work out to the same round-turn cost.
Related
Terms thatcome with it
Most rules only make sense next to the ones they interact with. These are the entries this one depends on.
Spread
The gap between the bid and the ask price. It is the cost paid on entry: a position opens slightly underwater by the width of the spread before the market has moved at all.
Commission
An explicit per-lot charge for executing a trade, usually quoted per side. Two sides make a round turn, so the quoted figure has to be doubled to get the cost of a completed trade.
Round turn
One complete trade - the entry and the exit together. Commission quoted per side has to be doubled to get the round-turn cost, which is the only figure worth comparing between firms.
Execution
The process of turning an order into a filled position - the price received, the delay before it arrives, and whether the order is filled in full. It is where a strategy meets reality.
Liquidity
How much can be traded at a given price without moving it. Deep liquidity produces tight spreads and reliable fills; thin liquidity produces wide spreads, slippage and gaps.
Also governed by /rules/commission
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