How Forex Apps Make Money (Spread, Commission, Swaps Explained)

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with any forex platform. Forex trading involves substantial risk of loss. This site compares software features only — not investment strategies or recommendations. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not indicative of future results.

The short answer

Forex apps make money in four ways: spread markup, commission, overnight swap fees, and inactivity charges. The relative weight of each depends on the broker’s business model. Understanding this is the prerequisite to reading any spread table honestly.

1. Spread markup — how “zero commission” brokers make money

The spread is the difference between the price you buy at (ask) and the price you sell at (bid). When a broker advertises “zero commission,” the entire revenue comes from the spread.

The broker buys execution from an institutional liquidity provider (banks, hedge funds) at the interbank rate — typically 0.1–0.3 pip on EUR/USD. They then charge you 0.8–1.5 pips. The 0.5–1.2 pip markup is the broker’s revenue on your trade.

At $100,000 monthly trading volume:

Broker charging 1.0 pip: $100–$180/month in spread costs to you
Broker charging 0.2 pip + $5 commission: $15–$25/month total

The “zero commission” platform costs 6–8x more at the same volume. This is the most common misconception in retail forex.

2. Commission — the transparent alternative

Commission-based brokers charge a flat fee per lot traded (e.g., $3.50 per side = $7 round-turn per standard lot) on top of a near-zero spread. This model is cheaper for high-volume traders and more predictable during news events (when spread-only brokers widen dramatically).

Pepperstone Razor, OANDA Core, and Tickmill Pro all use commission models. The all-in cost is typically competitive with or cheaper than spread-only brokers at moderate volumes.

3. Overnight swap fees (rollover)

When you hold a forex position past the daily rollover time (typically 22:00 GMT for most brokers), you pay or receive a swap fee. This reflects the interest rate differential between the two currencies in the pair.

Long GBP/USD: you are “borrowing” USD (which has a higher interest rate currently) and “holding” GBP. The net cost or credit depends on the current differential. Swap fees are not trivial for swing traders holding positions for days or weeks.

eToro, Plus500, and other retail-focused brokers sometimes charge wider swap spreads than institutional-facing brokers. Check the swap rates for any pair you intend to hold overnight.

4. Inactivity fees

A mechanism retail traders routinely overlook:

eToro: $10/month after 12 consecutive months of no login
Plus500: $10/month after 3 months of no trading activity (more aggressive)
OANDA, Pepperstone, Tickmill: no inactivity fees (as of 2026)

If you open a demo or live account and forget about it, you can return to find fees have eroded the balance.

What this means for choosing a broker

Low-volume beginner (under 5 lots/month): spread-only accounts are often adequate. The commission minimum on ECN accounts ($2–$5 per trade) can make them more expensive at low volumes.
Moderate-volume trader (5–20 lots/month): commission-based ECN accounts become cheaper.
High-volume or algo trader (50+ lots/month): ECN is significantly cheaper. Spread-only accounts become a major cost drag.