Forex Broker Spreads Explained: How Commissions and Markups Work

Every forex trade you place carries a cost, and that cost determines how efficiently you can trade. While most traders focus on charts, indicators, and execution speed, understanding how spreads and commissions work is one of the most overlooked aspects of trading performance. In 2025, with brokers adopting increasingly transparent pricing models, knowing where your trading costs come from is not just about saving money—it’s about knowing who you can trust.

Forex brokers structure their pricing through two main elements: spreads and commissions. Together, these represent the core of a broker’s revenue model and the foundation of your trading cost. The way a broker applies these charges, whether through direct market access or internal pricing, tells you everything about their transparency. Choosing a low spread forex broker can significantly improve trading efficiency by minimizing entry and exit costs across all trade sizes.

For A-Book brokers like Skyriss, spreads and commissions are not tools for profit manipulation. They are reflections of market liquidity and infrastructure cost—priced fairly, disclosed clearly, and executed transparently. Understanding how they work gives traders the clarity needed to make better decisions and recognize real value in a broker relationship.

What Is a Spread in Forex Trading?

The spread is the difference between the bid price (the price you sell at) and the ask price (the price you buy at). It’s how brokers and liquidity providers compensate themselves for facilitating trades.

When you look at a currency pair ,  for example, EUR/USD quoted at 1.1000/1.1002 ,  the two-pip difference represents the spread. This difference may seem small, but across large positions and high trading volume, spreads can significantly impact profitability.

In A-Book structures, spreads fluctuate naturally based on market liquidity. During major sessions, when liquidity is deep, spreads tighten; during low volume or high volatility, they widen. The key to identifying a transparent broker lies in how these changes occur ,  whether they’re natural or artificially inflated.

Skyriss maintains aggregated liquidity from multiple top-tier providers, ensuring that spreads reflect true market conditions rather than internal adjustments. Traders see what the market offers ,  not what a dealing desk decides.

Fixed vs Variable Spreads

Brokers typically offer either fixed or variable (floating) spreads. Fixed spreads remain constant regardless of market conditions, while variable spreads expand or contract based on real-time liquidity.

Fixed spreads are often used by Market Maker brokers, who control pricing internally. They can provide predictability but at the cost of realism. During volatile conditions, such brokers may freeze execution or reject orders to maintain control over exposure.

Variable spreads, used by ECN and STP brokers, are derived directly from liquidity providers. They change dynamically but remain transparent ,  the trader always receives the best possible bid and ask available in the market.

Skyriss operates exclusively on variable spreads sourced from institutional liquidity providers. This ensures traders experience genuine market behavior without artificial controls or widened spreads designed to increase broker profit.

Understanding How Brokers Earn from Spreads

Brokers earn revenue from spreads in two primary ways: through markups or raw pricing plus commission.

In a markup model, the broker adds a small premium to the raw market spread it receives from liquidity providers. For example, if the interbank spread on EUR/USD is 0.1 pip, the broker might display 0.5 pips to clients, keeping the 0.4-pip difference as revenue. This method is common among STP brokers and provides transparency if the markup is disclosed clearly.

In a raw spread model, the broker passes the interbank spread directly to the trader ,  often as low as 0.0 or 0.1 pips ,  and charges a separate commission per lot traded. This approach is typical of ECN brokers, where the focus is on institutional-grade execution rather than embedded pricing.

Skyriss employs both models depending on account type. Its raw spread accounts cater to professional traders seeking precision, while its standard accounts use minimal markups to ensure all clients benefit from tight, transparent pricing.

Commissions: The Second Component of Trading Costs

While spreads represent the market side of cost, commissions are the broker’s fixed service fee for facilitating your trade. They are usually charged per lot, either as a round-turn (for both opening and closing a trade) or per side.

ECN brokers typically charge a flat commission because they offer raw spreads from liquidity providers. For example, a trader might pay $6 per lot round-turn on a raw-spread account.

Commissions provide transparency ,  they are fixed, measurable, and independent of market volatility. For brokers, they ensure steady revenue without creating conflicts of interest with clients. For traders, they allow for precise cost calculation and fair competition.

Skyriss structures its commission system competitively, balancing cost efficiency with institutional-grade execution. By separating spread from commission, it allows traders to see exactly where their costs lie.

Markup Models and How They Affect You

Markups are not inherently bad. They become problematic only when applied inconsistently or without disclosure. In an ethical setup, a broker clearly states the markup applied to spreads, ensuring clients understand what they are paying for.

Some brokers hide excessive markups within “zero-commission” accounts, making it appear as though trading is free when costs are simply embedded in the spread. This lack of transparency can make it harder for traders to compare true costs across platforms.

A transparent broker discloses every component of cost ,  the raw liquidity spread, the markup, and any commission. Skyriss publishes all account specifications publicly, ensuring there is no hidden pricing manipulation or last-minute spread expansion.

The Role of Liquidity Providers in Spread Formation

At the heart of every broker’s pricing is liquidity. Liquidity providers ,  banks, hedge funds, and institutional trading desks ,  supply the bid and ask prices that brokers aggregate into their platforms.

The more liquidity providers a broker connects to, the deeper the order book and the tighter the spreads. However, not all brokers have equal access to top-tier liquidity. Smaller or unregulated brokers often rely on third-tier providers, leading to wider spreads and less stable pricing.

Skyriss, as a multi-licensed A-Book broker, maintains direct relationships with Tier-1 liquidity providers. Its pricing engine aggregates multiple streams in real time, selecting the best bid and ask combinations to provide the most accurate market representation possible.

This system ensures traders always receive pricing derived from real liquidity ,  not artificially generated internal quotes.

How Broker Models Influence Spread Behavior

Different broker types structure spreads differently:

• ECN brokers offer raw spreads from liquidity providers plus a fixed commission.
  
  

• STP brokers add small markups to cover operational costs.
  
  

• Market Makers set their own spreads internally and may alter them depending on market exposure.
  
  

In 2025, traders are more aware of these distinctions, leading to increased demand for A-Book brokers that combine ECN transparency with STP accessibility. Skyriss embodies this evolution, using straight-through routing that prevents any interference or manipulation while maintaining cost efficiency for all client types.

Why Spreads Widen and What It Means

Spreads naturally widen during periods of low liquidity ,  such as rollover hours, weekends, or major economic announcements. This is a function of reduced market depth, not broker manipulation.

However, when spreads widen excessively or unpredictably without corresponding market movement, it’s often a sign of internal dealing or poor liquidity aggregation.

By connecting directly to multiple providers, Skyriss ensures that even during high-impact events, spreads remain as stable as possible. Its execution system automatically rebalances flow to maintain pricing integrity, giving traders consistent access to real market rates.

Zero-Spread Accounts: Reality vs Expectation

Many brokers advertise “zero-spread” accounts to attract traders. While the term sounds appealing, it doesn’t mean trading is free. Zero spreads usually apply to certain pairs during specific conditions and are offset by higher commissions or markups elsewhere.

Transparent brokers clarify these limitations upfront. For example, a raw ECN account may show a 0.0 pip spread during high liquidity periods but still charge a $6–$8 commission per lot.

Skyriss offers raw spread accounts that reach near-zero levels during peak market hours but always discloses applicable commissions and trading conditions clearly. This ensures traders never face misleading marketing claims or unrealistic expectations.

Hidden Costs Traders Should Watch For

Not all trading costs are visible in the spread. Some brokers embed hidden markups, execution delays, or slippage to generate additional revenue. Others manipulate swaps or widen spreads during volatility to offset risk exposure.

A legitimate broker discloses all potential costs and minimizes hidden variables. Skyriss provides full pricing transparency through live spread monitoring, transaction cost analysis, and trade audit trails that clients can request at any time.

In a regulated environment, transparency isn’t optional ,  it’s proof of integrity.

Commissions vs Markups: Which Model Is Better?

Choosing between commission-based and markup-based accounts depends on trading style and frequency.

For scalpers or algorithmic traders executing dozens of trades daily, raw spread plus commission models are ideal because they provide consistent and measurable costs. For swing or long-term traders, markup accounts can offer simplicity without sacrificing fairness.

The key is whether the broker clearly explains how costs are structured. Skyriss allows clients to choose between both models depending on their strategy, ensuring flexibility without compromising transparency.

How Regulation Is Enforcing Cost Transparency

Regulators have made pricing transparency a key component of broker compliance. Firms must now publish average spreads, total trading costs, and execution statistics regularly.

In some jurisdictions, brokers are also required to provide transaction cost analysis (TCA) reports to prove that execution and pricing remain fair across client accounts.

This global push for clarity benefits traders directly. It allows them to compare brokers objectively rather than relying on vague marketing terms like “tight spreads” or “low fees.”

Skyriss aligns with these requirements by continuously updating its pricing data and maintaining open access to performance reports, ensuring full compliance and client confidence.

How Spreads Affect Profitability

Every pip of spread reduces the effective profit margin of a trade. For example, if a strategy averages 10 pips of profit but pays 2 pips in spread, 20% of potential return is lost to cost. Over time, especially for high-frequency traders, this difference determines whether a strategy remains viable.

This is why institutional traders prioritize brokers with raw pricing and transparent commissions. Knowing the exact cost per trade allows for precise risk and reward calculations.

Skyriss’s pricing model supports both discretionary and automated strategies by minimizing spreads and providing stable execution across all liquidity conditions.

Rebates, Discounts, and the Illusion of “Free” Trading

Some brokers offer cashback or rebate programs that appear to reduce trading costs. In reality, these incentives often offset inflated markups or hidden fees. Traders should evaluate net costs ,  total spreads, commissions, and any rebates combined ,  to determine the real price of execution.

Transparent brokers don’t rely on gimmicks. They compete through technology, liquidity, and service reliability. Skyriss focuses on delivering verifiable pricing advantages rather than marketing-based incentives, ensuring that cost efficiency is built into the system itself.

Evaluating Broker Transparency in Pricing

When comparing brokers, traders should look beyond advertised spreads. Key questions include:

• Does the broker disclose its liquidity sources?
  
  

• Are commissions and markups clearly stated?
  
  

• Is execution verified by third-party audits or reports?
  
  

• Does pricing fluctuate logically with market conditions?
  
  

Brokers that provide clear, consistent answers to these questions demonstrate real transparency. Skyriss meets these standards by combining regulatory oversight, liquidity reporting, and real-time execution monitoring into one unified system.

The Psychology of “Low Spread” Marketing

Many traders fall into the trap of chasing the lowest advertised spread without considering overall execution quality. A 0.0 spread means little if slippage, re-quotes, or delays eat into performance.

Real trading cost is the sum of spread, commission, and execution quality. The brokers that understand this ,  and disclose all three ,  are the ones traders can rely on long-term.

Skyriss educates its traders on this balance, emphasizing that transparency in pricing builds trust far more effectively than artificially low numbers.

Why Execution Matters as Much as Cost

Tight spreads lose their value if execution is inconsistent. A one-pip spread advantage means little if slippage adds two pips during volatile markets.

This is why evaluating broker infrastructure is as important as evaluating pricing. Low-latency systems, liquidity depth, and order-routing quality all determine how closely your executed price matches your intended entry.

Skyriss maintains institutional-grade technology designed to preserve execution accuracy. Its co-located servers and smart order-routing system ensure that every millisecond counts ,  not only in performance but in cost preservation.

Choosing the Right Cost Model for Your Strategy

There’s no one-size-fits-all approach to spreads and commissions. Scalpers, day traders, and algorithmic systems benefit from raw spreads with transparent commissions, while swing and position traders may prefer slightly marked-up spreads for simplicity.

The key is to trade with a broker that offers both ,  and makes it clear which model you’re using. Skyriss gives traders this flexibility, ensuring that each account type remains aligned with individual trading needs without compromising on transparency.

The Future of Forex Pricing Transparency

The future of forex pricing is moving toward proof-based transparency. Technologies like blockchain verification and AI-driven liquidity routing are making it possible for traders to audit execution quality and pricing sources independently.

In 2025 and beyond, brokers will no longer compete on promises but on proof. Those that can verify every spread, commission, and execution metric will define the next era of trading integrity.

Skyriss is already part of that transition. Its transparent pricing ecosystem ,  supported by verifiable liquidity and regulatory oversight ,  reflects where the industry is heading: toward full accountability and trader empowerment.

The Foundation of Fair Trading

Understanding how spreads and commissions work gives traders more than cost awareness ,  it provides control. Knowing what you pay, why you pay it, and how it affects your performance is the difference between informed participation and blind trust.

In the modern forex landscape, transparency isn’t a feature ,  it’s the foundation. Brokers that build around fairness, verification, and clear communication are the ones that will last.

Skyriss represents that standard: a broker where every spread, every commission, and every execution reflects one principle ,  that trading costs should be as open and fair as the markets themselves.