Every term we use, explained once.

All-in cost

Our own combined figure, not something brokers publish: spread plus commission for one round turn on a standard lot. We use it because spread and commission can't be compared directly across brokers that price differently. See Compare for how we calculate it.

Ask price / Bid price

Every instrument quotes two prices at once: the bid is what you'd receive selling right now, the ask is what you'd pay buying right now. The ask always sits slightly above the bid. That gap is the spread.

Base currency / Quote currency

In a pair like EUR/USD, the base currency (EUR) is the one being bought or sold; the quote currency (USD) is how much of it costs to buy one unit of the base.

CFD (Contract for Difference)

A contract between you and the broker that settles the price difference of an asset between when you open and close it. You never own the underlying share, currency or commodity. You're trading its price movement, almost always with leverage.

Commission

A per-lot fee some brokers charge on top of the spread, usually for a full round turn rather than per side. Brokers that charge commission typically offer a much tighter "raw" spread in exchange — See All-in cost for the figure that combines both.

Compensation scheme

A fund that can reimburse you if your broker itself becomes insolvent — it does not cover trading losses. Whether one exists, and for how much, depends entirely on the regulator; see Regulators for exactly which scheme applies where.

Copy trading (social trading)

A feature that automatically mirrors another trader's positions in your own account, scaled to your balance. If they risk 1% of their account on a trade, your copy risks roughly 1% of yours, not the same dollar amount. It doesn't remove market risk: you share, proportionally, every loss the trader you copy makes.

Demo account

A practice account funded with virtual money, usually running on live or delayed prices, for testing a platform or strategy without risking real funds.

Execution speed (median fill)

How long it takes an order to be confirmed once you place it, measured in milliseconds. Slower execution — especially during volatile moments — increases the chance of slippage.

Leverage

Lets you control a position larger than your own deposit — 30:1 leverage means $1,000 of your own money can open a $30,000 position. It multiplies gains and losses equally. Retail leverage on major currency pairs is capped at 30:1 under both ASIC and CySEC/EU rules; offshore-licensed entities commonly allow far higher leverage, with correspondingly less oversight of the risk that creates.

Liquidity

How easily an instrument can be bought or sold without moving its price. The major currency pairs are among the most liquid instruments traded anywhere, which is a big part of why their spreads are usually the tightest on offer.

Lot

The standard unit of trade size: a standard lot is 100,000 units of the base currency, a mini lot 10,000, a micro lot 1,000. Some brokers also offer nano lots of 100 units.

Margin

The part of your own money a broker sets aside as collateral while a leveraged position is open. It isn't a cost, and you get it back when you close the trade. If losses eat too far into it you'll get a margin call. If it falls further, the broker closes your positions automatically (a stop-out) so your balance can't go negative.

Market maker vs. ECN/STP

Two ways a broker fills your orders. A market maker takes the other side of your trade itself, which is a conflict of interest: it can profit when you lose. An ECN or STP broker passes your order to outside liquidity providers and earns the spread or commission whether you win or lose.

Negative balance protection

A guarantee that your account can never go below zero, even in an extreme market move — the broker absorbs any shortfall rather than pursuing you for it. It exists largely because of the 2015 Swiss franc shock, when the Swiss National Bank abruptly removed its EUR/CHF floor and the pair moved roughly 30% in minutes, leaving many retail accounts deeply negative and pushing some brokers into insolvency. FCA, ASIC and CySEC all now require it for retail clients.

Pip

The smallest standard price move for most currency pairs: 0.0001 for most, 0.01 for pairs with the Japanese yen. Some brokers quote one more decimal place, a pipette, worth a tenth of a pip.

Round turn

A complete trade: opening a position and later closing it. Cost figures like commission and all-in cost are quoted per round turn rather than per side, so they reflect the full cost of a trade, not half of it.

Slippage

The gap between the price you expected and the price you got. It can go either way, though a worse price is more common for retail traders, and it grows in fast markets or when execution is slow.

Spread

The gap between the bid and ask price, and the most immediate cost of every trade. Brokers price it two ways: a wider spread with no separate commission, or a tight "raw" spread, sometimes near zero on major pairs at peak hours, plus a per-lot commission. Comparing spreads alone across the two models is misleading. See All-in cost.

Swap (overnight financing, rollover)

The cost, or occasionally the credit, of holding a position past the daily rollover. It's based on the interest-rate difference between the two currencies plus the broker's markup. Because currency trades settle two days later, Wednesday usually carries triple swap to cover the weekend.

Volatility

How much, and how fast, a price is moving. Higher volatility means bigger swings both ways and, in fast conditions, more slippage.