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The main point of comparison, which plays a role for many traders when trading CFDs and Forex, is of course the costs involved. These are by far not as decisive as it is for example the case with the securities trade. Nevertheless, especially professional traders, who trade with relatively high volumes, naturally make sure that they choose the cheapest possible Forex broker.
Therefore we would like to discuss the costs in our guide, especially of course with the broker FXPro. This provider is a classic CFD and Forex broker, so that the typical costs for this trading area are incurred, which we will discuss in more detail later.
What costs are coming up?
If you’ve already spent some time trading Forex and CFDs, you’ll probably already know what the typical costs are that you’ll have to consider with almost any broker.
However, if you are still a beginner, we would like to give you a brief overview below of the costs involved and which of these costs are also incurred by FxPro. In the first instance, it is the following fees that are worth noting:
- Market Spreads
- Financing costs
- Costs for deposits and withdrawals
- Overnight costs
The cost factors you will find with virtually every Forex and CFD broker include spread and financing costs. The spread is the difference between the buy and sales price quoted by the broker. Depending on the currency pair, it usually ranges between 1.5 and 20 pips. As an alternative or in addition to the spread, some Forex and CFD brokers charge another type of cost, namely commission. Although these are relatively rare, especially in Forex trading, you should still know and be able to identify this cost factor.
Financing costs are also typical for almost every Forex and CFD broker, including FXPro. They involve the broker charging interest on the capital provided, assuming that a position is not closed by 10 pm in the evening, for example, and therefore carried over to the next day. However, due to the current low-interest phase, you can often neglect the financing costs, as they are only a fraction of the costs you would have to bear, for example, in the form of interest on a normal loan.
Other cost factors that do not occur with every broker, but can occur in general, are fees for deposits and withdrawals, and inactivity fee for a longer period of non-use of the trading account, and costs for additional services. Therefore, for example, it may be a particularly professional trading platform that is equipped with numerous additional services in addition to the basic version and for which the broker charges money for use.
Markets Spread: Forex and CFD trading
As mentioned above, FXPro is a typical Forex and CFD broker. This means that first of all when trading currency pairs and contracts for difference, the typical costs in the form of the respective spread are incurred by the trader. In the following, we would like to give you some exemplary currency pairs with the respective average spreads:
- Dow Jones 30 Index: 3.0 points
- Euro Stoxx 50: 3.0 points
- DAX: 2.0 points
- Gold: 0.30 points
For the indices listed above and for all other Index-tracking CFDs, you should also note that the margin used per a lot of trading volume is 2%. When trading Commodity CFDs, the margin is slightly lower, ranging from 0.50 to 1.0 percent depending on the trading platform. It is also important to note that no commission is charged by the broker when trading equity CFDs.
In addition to the spreads, it is certainly also interesting to know what minimum trading size the broker estimates. This can also be found under the heading “Markets” because the broker provides very transparent information about the estimated swaps, the spreads, and also the lot size to be observed. This is, for example, 100 ounces when trading Gold CFDs, 25 USD multiplied by the DAX index when trading a DAX CFD, or 5,000 ounces when trading silver.
Among the other costs that you should know about the broker, FXPro is first of all the financing costs. The broker specifies these as swaps and the amount depends mainly on which currency pair the customer chooses and whether he goes “long” or “short” in the respective position.
For example, if you hold a euro / US dollar position overnight, the swap is currently -4.56 for a long position, while the value is -2.63 for a short position. This allows you to view the current swap for each tradable currency pair through the broker’s information.
Another cost factor, which we have already mentioned in our guide to deposits and withdrawals with the broker FXPro, is the cost of deposits. While withdrawals are free of charge, you should note that there are fees for deposits made by credit or debit card and PayPal. For all non-UK credit and debit cards, the fees are 1.6 percent, while a deposit via PayPal is subject to a fee of 2.7 percent.
Charges in a glance:
|Bank transfer Broker to Broker||Free of charge but the correspondent bank may charge a fee|
|PayPal||A fee up to 2,7 % is charged when a withdrawal is made without a trade|
|Skrill||A fee up to 2,6 % is charged when a withdrawal is made without a trade|
|Neteller||A fee up to 2,0 % is charged when a withdrawal is made without a trade|
Overnight costs arise with this broker. They are also known as rollover and is charged when a trade is kept overnight. This means, that every trade that happens after 10 pm, is defined as an overnight dress. The swap is then charged to the account of the client in the currency which is set in the user’s account. Please bear in mind with this broker, that overnight costs over the weekend are charged for each day and are therefore three times higher than usual.
When trading with Forex, users can calculate the overnight charge:
Swap = (Pip value * Swap Rate * Number of Nights) / 10
Conclusion: Fees are fair
The Forex and CFD broker FXPro estimates the classic costs and fees you would expect to pay when trading CFDs or currency pairs with almost any broker. This includes in particular the spreads, which are at an average level. The broker also charges financing costs if a position is held overnight.
You can find out about the level of the costs under the menu item “Markets” on the broker’s website, which provides transparent information about the spreads or also the financing costs. The same applies to the costs incurred by some deposit methods, namely when depositing by credit card, EC card, and also by PayPal. Here we recommend that you choose one of the free deposit methods, for example, bank transfer or deposit by Neteller. Withdrawals, however, are completely free of charge and there are no other noteworthy costs that we believe you should be aware of with Broker FXPro.
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