Account types: standard, raw spread, cent

A reader once compared two statements side by side. Both showed one round trip on USD/INR at around 83.2500. One statement listed a single charge. The other listed a smaller charge plus a separate line. The two totals were close, but the second reader had assumed the smaller charge was the whole cost. The mistake was not the maths. It was reading only the first line.

A broker earns from your trading in more than one way. On a standard account, the charge is built into the spread. The spread is the gap between the price at which you can buy and the price at which you can sell. You pay it without seeing a separate deduction. On a raw spread account, the spread is narrower, and the broker adds a commission. The commission is a separate amount, charged per lot, and it appears on the statement as its own entry.

The total cost is what leaves your account, not what the first line says. For one standard lot on USD/INR, a pip is worth about ₹10. That figure comes from the contract size, not from the broker. A 3-pip spread costs ₹30. A 1-pip spread costs ₹10, and if the commission is ₹20 per round trip, the total is ₹30. Change the commission to ₹25 and the total becomes ₹35. The raw spread account is cheaper only when the commission is small enough.

Start with the spread in pips. Multiply it by the pip value for one lot. On USD/INR, one standard lot gives about ₹10 per pip. If the spread is 2 pips, the spread cost is ₹20. If it is 4 pips, the spread cost is ₹40. Write this number down before you look at anything else.

Then find the commission. Brokers quote it in different ways. Some charge per side, so a round trip means two charges. Some charge per round trip as a single amount. Some quote a figure per lot, and some quote it per million units of currency. The amount also varies between brokers, so no single figure is correct for all accounts. Read the fee schedule on your own account and use that number.

Add the two figures. That total is the cost of one round trip, before any other fees. A standard account with a 3-pip spread costs ₹30. A raw spread account with a 1-pip spread and a ₹20 commission costs ₹30. A raw spread account with a 1-pip spread and a ₹30 commission costs ₹40, which is more than the standard account. The account type is not the answer by itself. The numbers are.

The pip value depends on the lot size. One standard lot on USD/INR gives about ₹10 per pip. A mini lot gives about ₹1 per pip. A micro lot gives about ₹0.10 per pip. A cent account works on a much smaller contract size again, so the same spread in pips costs a fraction of the standard figure. The spread and the commission do not change, but the amount in rupees does.

Spreads move. The figure you see on a quiet day is not the figure you will see when a major announcement is due. Spreads often widen when liquidity is thin, and they can widen sharply around scheduled data. A standard account with a 3-pip spread on a quiet morning may show a wider spread later the same day. The commission usually stays fixed, but the spread does not.

Brokers also differ in how they round. A pip value may be rounded to the nearest rupee or shown to two decimal places. Commission may be charged per side or per round trip, and some brokers add a small fee on deposits, withdrawals or inactivity. Payment methods such as UPI and bank transfer may carry their own charges from the provider. Check the fee schedule and the statement, not the headline spread alone.