Hello to all. I recently opened a demo account on ICMarkets and connected it to TradingView to fiddle a bit. I noticed that in addition to the spread, there is a commission currently -4.64. It was my understanding that it’s either or but not both. Could you please clarify things for me? I was already amazed by finding out that they set up the account for a 500:1. Thank you
Spread is the difference between the lowest seller willing to sell and higher buyer willing to buy.
If there is no spread, which means the price of the lowest seller and the price of the higher buyer coincides, which means a trade occurs.
The point is there will always be a spread in whatever market you trade.
It would be small spread in very liquid markets, and large spread in illiquid markets (e.g. small cap stocks).
Commissions is what brokers charge you to place a trade.
Now there might be brokers who advertise themselves as “no commissions” trading.
Fair enough, but they might incorporate larger artificial spreads on the instruments you are trading so as to make the money back from there. They probably don’t tell you it is “larger spreads”, they just tell you what the spread they offer is. And you assume it is the best spread you can get. This is especially common for instruments like CFD / Spread betting because the data is “based on” the price of the underlying, but not the true values from exchanges, you are trading a chart given to you by the broker. If you shop around various brokers, you would find the price of similar CFD products slightly differ across brokers… Not saying they fake the prices (because that would be too obvious a fraud), but they can choose whatever spread they want and that’s how they have an edge over you…
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