What happens when you press Buy
Order routing from platform to price
A screen tap is not a trade. It is a message. Your platform sends that message to the broker's server, and the broker's server sends it onward to a liquidity provider. That provider is a bank or a similar institution that quotes prices in USD/INR. The message asks for a price at which the provider will sell you dollars or buy them from you. Until a provider answers, nothing has happened to your money.
The provider answers with two prices. One is the bid, the price at which it will buy from you. The other is the ask, the price at which it will sell to you. The gap between them is the spread. If the ask is 83.2505 and the bid is 83.2500, the spread is 5 pips. That gap is not a fee you pay later. It is already inside the price you receive.
Your platform shows the ask when you press Buy and the bid when you press Sell. This is why the first number on your ticket is never the number you saw a second earlier. The price travels from the provider, through the broker's server, to your screen. Each hop can add a small delay. In fast markets, the price you accept and the price you get can differ. That difference is called slippage, and it is not an error.
Fill price and the open position
A fill is the moment a provider accepts your order at a specific price. That price is written to your account and becomes the entry price of your open position. If you pressed Buy on 1 standard lot of USD/INR, the fill might be 83.2500. From that second, your position has a value that moves with every pip. On one standard lot, one pip is ₹10. On 0.10 lots, one pip is ₹1. The pip value is fixed by the lot size, not by the price level.
An open position is not a completed trade. It is a live contract. The broker holds it on your behalf and marks it to the current market price. If the price moves in your favour, the position shows a floating profit. If it moves against you, it shows a floating loss. Neither is final. The money has not left your account, and no profit has been secured. The position exists only as a running calculation.
While the position is open, the broker may apply a swap if you hold it past a certain time. Swap is an interest adjustment between the two currencies in the pair. It can be positive or negative, and it varies between brokers. It attaches to the open position, not to the order. A position held for minutes may have no swap. A position held for days will have several. The exact amount depends on the broker's terms and the size of the position.
Closing the position and the costs attached
Closing is a second order. It goes through the same path as the first. Your platform sends a message, a provider answers with a price, and that price becomes the close price. If you bought at 83.2500 and close at 83.2525, the move is 25 pips. On one standard lot, 25 × ₹10 = ₹250. That is the gross result. It is not the money you keep. The spread was already taken when you opened, and any commission is taken when the close is filled.
The gross result and the net result are different numbers. Suppose the broker's total charges come to ₹35. Then ₹250 − ₹35 = ₹215. The ₹35 is not a change in pip value. It is the cost of the path. If you trade 0.10 lots and the price moves 20 pips, the gross is ₹20, because one pip is ₹1. The same charges, if they apply, would reduce that. The smaller the position, the larger the charges are relative to the gross.
After the close, your account balance changes. That change is the net result. If the balance does not match your gross calculation, the difference is the cost of the path. It is not an arithmetic mistake. The fix is to record three numbers: the fill price, the close price, and the total charges. Then compare the balance change to the gross. Over time, that habit shows you exactly where your money goes. It also shows you which costs are fixed and which vary between brokers.
One order path on USD/INR at 83.2500
| Step | Amount | Note |
|---|---|---|
| Order placed | Buy 1 standard lot USD/INR | You press Buy on the platform; the request leaves your device. |
| Fill price | 83.2500 | The price at which the broker matches your order. |
| Open position | 1 standard lot at 83.2500 | The trade is now live on your account; nothing is settled yet. |
| Close price | 83.2510 | You close ten pips above the fill. |
| Pip value | ₹10 per pip | 100,000 × 0.0001 = ₹10 on one standard lot. |
| Gross result | ₹100 | 10 pips × ₹10 per pip = ₹100 before any charges. |
| Costs | Varies | Spread, commission and any swap differ between brokers and are not fixed here. |
| Net result | ₹100 minus costs | The figure you keep after the broker's charges are applied. |
The broker may round the fill price, quote a spread at the moment of execution, charge a commission per lot, and apply a swap if the position is held overnight. All of these vary between brokers, so the net figure can be lower than the gross figure shown.
Doing it once, step by step
The reader will follow one USD/INR order from the platform to the closed position, noting the price and cost at each step.
- 01
Press Buy and note the ask
Look at the ask price on your platform before you press Buy. Write it down. That is the price the broker is offering to sell you USD/INR. The bid is the price at which it will buy from you. The gap between them is the spread, and it is already part of your cost.
- 02
Record the fill price
After the order is accepted, find the fill price in your order history. That is your entry price. It may differ slightly from the ask you saw. Write it beside the ask. The difference is slippage, and it is normal in fast markets. The fill price is the number that matters for your position.
- 03
Watch the open position
The position now shows a floating profit or loss. On 1 standard lot of USD/INR, each pip is ₹10. On 0.10 lots, each pip is ₹1. Check the pip value for your lot size. Do not treat the floating figure as final. It changes with every price tick.
- 04
Close the position and note the close price
When you close, the platform sends a second order. The price you get is the close price. Write it down. If you bought at 83.2500 and closed at 83.2525, the move is 25 pips. Multiply by your pip value to get the gross result.
- 05
Subtract the total charges
Add up the spread cost, any commission, and any swap. Subtract that total from the gross result. The answer is your net result. For example, ₹250 gross minus ₹35 charges leaves ₹215. The charges vary between brokers, so check your own statement.
- 06
Compare the balance change
Look at your account balance before and after the close. The difference should equal your net result. If it does not, the gap is a cost you have not yet identified. Record it. Over several trades, this habit shows you the true cost of your order path.
The mistake most people make here
Many beginners watch only the open position and forget that the close is a separate step with its own price. They also treat the gross result as the money they keep, when the spread and any commission have already been taken somewhere along the path. The fix is to note the fill price, the close price and the costs as three separate numbers, then check the account balance after the close. If the balance does not match the gross result, the difference is the cost of the path, not an error in the arithmetic.Check yourself
You buy 1 standard lot of USD/INR at 83.2500 and close it at 83.2525. What is the gross result in ₹?
The move is 25 pips. At ₹10 per pip on one standard lot, 25 × ₹10 = ₹250 before costs.
You buy 0.10 lots of USD/INR and the price moves 20 pips in your favour. What is the gross result in ₹?
One pip on 0.10 lots is ₹1, because 0.10 × ₹10 = ₹1. So 20 pips × ₹1 = ₹20 before costs.
Your gross result is ₹100 and the broker's total charges come to ₹35. What is the net result?
₹100 − ₹35 = ₹65. The ₹35 is the cost attached to the order path, not a change in the pip value.
Questions that come up next
Why did my order get a different price from the one I saw on screen?
The price on your screen is the last price the platform received from the broker. By the time your order reaches a provider, that price may have changed. The provider answers with its own current bid or ask, and that becomes your fill. The difference between what you saw and what you got is slippage. It is normal in fast markets and is not a mistake by the broker.
Is the spread a fee that is charged separately?
No. The spread is the gap between the bid and the ask. You receive the ask when you buy and the bid when you sell. That gap is already inside the price of your fill. You do not see a separate line for it on your statement. It is one of the costs attached to the order step.
When does a swap get charged on my position?
A swap is an interest adjustment between the two currencies in the pair. It is applied if you hold the position past a certain time set by the broker. That time varies between brokers. A position opened and closed within minutes usually has no swap. A position held overnight will have a swap, which can be positive or negative.
Why does my account balance not match the gross profit I calculated?
The gross profit is the pip movement multiplied by the pip value. The balance also includes the spread, any commission, and any swap. Those costs are taken at different steps along the order path. So the balance after closing is the net result. The difference between gross and net is the cost of the path, not an arithmetic error.
Can I close my position at any time?
You can send a close order whenever the market is open. The close order follows the same path as the open order. It goes to the broker, then to a provider, and gets filled at a price. That price becomes your close price. The position then ends and the net result is added to your account balance.
Does the pip value change if the price of USD/INR moves?
No. The pip value is fixed by the lot size you trade. On one standard lot of USD/INR, one pip is ₹10. On 0.10 lots, one pip is ₹1. The price level does not change that. So you can calculate the gross result of any move by multiplying pips by the pip value for your lot size.
The words used on this page
- bid
- The price at which a liquidity provider will buy from you. When you press Sell, your platform shows the bid. It is usually lower than the ask.
- ask
- The price at which a liquidity provider will sell to you. When you press Buy, your platform shows the ask. It is usually higher than the bid.
- spread
- The gap between the bid and the ask. It is not a separate fee. It is already included in the price you receive when your order is filled.
- fill
- The moment a provider accepts your order at a specific price. That price becomes the entry price of your open position. It may differ from the price you saw on screen.
- slippage
- The difference between the price you expected and the price you actually got. It happens because prices move while your order travels. It is not an error.
- swap
- An interest adjustment between the two currencies in a pair. It is applied if you hold a position past a certain time. It can be positive or negative and varies between brokers.
What to take away
- An order goes from your platform to the broker to a provider, and each hop can change the price you get.
- The fill price becomes your entry price, and the position is a live calculation until you close it.
- Costs attach at different steps: spread at the order, commission at the fill, swap while open.
- The balance after closing is the net result, and any difference from the gross figure is the cost of the path.