Account types: standard, raw spread, cent
By the end, the reader can add spread and commission together and see which account type costs less for the size of trade they actually place. The chart does not change between account types. Only the cost does.
The chart shows the price, the account type sets the cost
Open any EUR/USD chart and you see one line of prices. The bid sits on the left, the ask on the right, and the gap between them is the spread. That picture is the same whether the account behind it is standard, raw spread, or cent. The chart is a record of the market, not a record of your costs.
What changes is how the broker charges for the service of matching your order. A standard account folds the charge into the spread. A raw spread account shows a spread close to the raw market gap and adds a separate commission in cash. The number on the chart gets smaller, but the money leaving your account does not automatically get smaller with it.
This matters because the chart is the first thing a beginner looks at, and it is the last thing that tells you what you pay. The lesson here is to read the chart for direction and read the account statement for cost. Two numbers, two places, and neither one replaces the other.
What a cent account changes about the size of each pip
A cent account works by shrinking the contract. Instead of one standard lot of 100,000 units of EUR/USD, you trade a fraction of that, and the broker names the account for the smaller unit of money it uses. The chart looks identical. The pip on the chart looks identical. What changes is how many pesos that pip is worth when the position closes.
If one pip on a standard lot is worth about ₱560, the same pip on a cent account is worth a small fraction of that. The exact fraction depends on the broker, so it varies. The principle does not vary: a smaller contract means a smaller peso value per pip, which means a smaller cost per trade in peso terms.
The cent account is not cheaper because the broker is generous. It is cheaper in peso terms because you are trading a smaller position. The spread in pips may be the same or wider. The commission may be absent or present. What shrinks is the size, and the cost shrinks with it. That is the whole point of the account type.
Why the smaller spread number is not the smaller bill
A raw spread account quotes a spread of 0.2 pips on EUR/USD. A standard account quotes 1.6 pips. The first number is eight times smaller, and that is the number a beginner sees first. But the raw spread account also charges a commission in cash, and that commission does not shrink when the spread shrinks.
On the same round trip, the raw spread account costs 0.2 pips plus ₱1,120. At ₱560 per pip, 0.2 pips is ₱112. Add the commission and the total is ₱1,232. The standard account at 1.6 pips costs ₱896. The account with the smaller spread number costs ₱336 more on this trade.
The comparison flips when the trade size changes. A raw spread account often suits larger positions, because the commission is spread across more pips. A cent account often suits smaller positions, because the peso value of each pip is smaller. There is no account type that wins at every size. There is only the arithmetic for the size you actually trade.
One round trip on EUR/USD: 1.6 pips against 0.2 pips plus ₱1,120
| Step | Amount | Note |
|---|---|---|
| Instrument and price | EUR/USD near 1.0850 | the price shown on the chart is the same on both account types |
| Trade size | 1 standard lot | 100,000 units of the base currency |
| Value of one pip | 10 units of the quote currency | 100,000 x 0.0001; converted at the current rate, about ₱560 at ₱56 to the dollar |
| Standard account spread | 1.6 pips | the shaded band on the left screen; brokers quote different spreads and this figure varies |
| Standard account cost | 1.6 x ₱560 = ₱896 | spread only, no separate commission |
| Raw spread account spread | 0.2 pips | the narrower band on the right screen; this figure also varies between brokers |
| Raw spread account commission | ₱1,120 | charged per round trip per lot; brokers set different commission amounts |
| Raw spread account cost | (0.2 x ₱560) + ₱1,120 = ₱112 + ₱1,120 = ₱1,232 | spread plus commission |
| Difference on this trade | ₱1,232 - ₱896 = ₱336 | the raw spread account costs more here, because the commission is larger than the spread saved |
The broker may round the pip value, widen the spread at busy times, charge swap if the position is held overnight, and add conversion costs if the account is funded in pesos. Commission amounts and spread figures vary between brokers, so the numbers above are a worked example, not a quote.
Doing it once, step by step
You will take one round trip on EUR/USD and work out the total cost on three account types, using the numbers on the page. Do the arithmetic in order, and compare the totals only at the end.
- 01
Write down the pip value in pesos
Start with one standard lot of EUR/USD. One pip is 10 units of the quote currency. At about ₱56 to the dollar, one pip is 10 times ₱56, which is ₱560. Keep this number beside you for every step that follows.
- 02
Price the standard account round trip
The standard account quotes a spread of 1.6 pips. Multiply 1.6 by ₱560. The result is ₱896. This is the whole cost of the round trip on this account type, because the spread is the only charge shown.
- 03
Price the raw spread account round trip
The raw spread account quotes 0.2 pips plus ₱1,120 commission. Multiply 0.2 by ₱560 to get ₱112. Add the ₱1,120 commission. The total is ₱1,232.
- 04
Compare the two totals
Subtract ₱896 from ₱1,232. The difference is ₱336. On this trade, the standard account is cheaper. The raw spread account only becomes cheaper when the commission is divided across a larger position, so the size you trade decides the answer.
- 05
Test the cent account at your own size
Take the position size you actually plan to trade, not the standard lot used above. Work out the peso value of one pip at that size. Then add the spread and any commission the broker charges. Compare that total against the other two account types at the same size.
- 06
Check the costs that sit outside the spread
Ask the broker how the pip value is rounded and whether the spread widens at busy times. Ask about swap if you hold a position overnight. Ask about conversion costs if the account is funded in pesos. Commission amounts and spread figures vary between brokers, so treat every number here as a worked example and not as a quote.
The mistake most people make here
The common mistake is to read the raw spread account as the cheaper one because the number on the chart is smaller. The spread is only one part of the cost. The commission is the other part, and on a small trade the commission can be larger than the spread saved. Before choosing, add both numbers for the size you actually trade, then compare the totals. If the plan is to trade smaller sizes, a cent account may suit better, because the same pip movement is worth less money and the cost per trade is smaller in peso terms.Check yourself
On one standard lot of EUR/USD, one pip is 10 units of the quote currency. At ₱56 to the dollar, what is one pip worth in pesos?
10 x ₱56 = ₱560.
A standard account quotes a spread of 1.6 pips on one standard lot. What is the cost of the round trip in pesos?
1.6 x ₱560 = ₱896.
A raw spread account quotes 0.2 pips plus ₱1,120 commission on the same trade. What is the total cost, and which account is cheaper?
(0.2 x ₱560) + ₱1,120 = ₱112 + ₱1,120 = ₱1,232. The standard account is cheaper on this trade by ₱1,232 - ₱896 = ₱336.
Questions that come up next
Which account type is cheaper if I only trade small sizes?
It depends on the total, not on the spread alone. Add the spread cost in pesos to the commission in pesos for the size you actually trade. On small sizes the commission often stays the same while the spread saving shrinks, so a standard or cent account can come out cheaper. The only way to know is to run the addition with your own numbers.
Why does the commission stay the same when my trade gets smaller?
Commission is usually charged per lot or per round trip, not per pip. A smaller position moves fewer pips' worth of money, but the cash charge for placing the order does not fall with it. That is why the commission can outweigh the spread saved on a small trade. Check whether your broker charges per lot or as a percentage, because this varies.
Can I move my money between account types later?
Usually yes, but the process differs by broker and some brokers treat each account type as a separate application. Ask before you fund, because moving may mean closing positions and opening a new account. Nothing about the chart or the platform changes when you switch. Only the cost structure changes.
Does a cent account mean I risk less per trade?
It means each pip is worth less in pesos, so the same price move costs or pays less. Your risk still depends on how many lots you open and where your stop sits. A cent account makes small positions possible, not safe ones. Position size and stop distance still decide the outcome.
Where do I see the commission before I trade?
It is not on the chart. Look for a commission schedule or fee page on the broker's site, or a contract specification sheet for the instrument. Some platforms show an estimated cost before you confirm an order. If you cannot find the figure, ask support in writing and keep the reply.
Is a raw spread account better for holding positions overnight?
Holding overnight adds swap, which is separate from both spread and commission. A lower spread does not reduce swap. Swap depends on the instrument, the direction of the position and the broker's rates, and it varies. Compare the full cost including swap if you plan to hold.
The words used on this page
- Spread
- The gap between the price you can buy at and the price you can sell at. It is measured in pips and is one part of what a trade costs.
- Commission
- A cash charge the broker takes for placing the trade, separate from the spread. It is charged in money, not in pips, so it does not shrink when the spread does.
- Standard lot
- A fixed contract size, commonly 100,000 units of the base currency. On EUR/USD one pip on a standard lot is 10 units of the quote currency.
- Cent account
- An account where the contract size is a fraction of a standard lot, so each pip is worth less in pesos. The chart looks the same; the money per pip does not.
- Swap
- A charge or credit applied when a position is held past the daily rollover. It is separate from spread and commission and varies by broker and instrument.
- Round trip
- Opening a position and closing it again. Costs such as spread and commission apply across both sides of the trade.
What to take away
- The chart shows the market price; the account type decides what you pay for it.
- Raw spread moves cost from the spread into commission rather than removing it.
- Add spread and commission in pesos for the size you trade before comparing accounts.
- A cent account lowers the peso value of each pip because the position is smaller, not because the broker is cheaper.