What commission is

A charge, not a price 

A spread is paid by crossing a quote. The cost is inside the price, no money leaves the balance as a fee, and the position simply starts behind. Commission behaves in a different way entirely. It is a fee in the ordinary sense of the word: the quote is untouched by it, the position opens exactly where the price says it opens, and a separate debit is booked against the account balance with its own line, its own timestamp and its own label in the account history.

Two things follow from that, and both of them are useful. The cost is visible without being inferred, because it is printed rather than embedded. And it is denominated in money rather than in pips, so it does not have to be converted through a contract size before it can be added to anything else. A commission line is already in the units a total is added up in.

What a commission is not is a flat charge per trade. It is always a rate, and the rate is always applied to something the size of the position determines. Two conventions dominate, and most of this lesson is about how they differ: a rate stated per lot, and a rate stated per unit of notional value. Both are rates. Both are multiplied by a quantity chosen when the position is opened. Neither is the cost of anything until that quantity is known.

Per side, and why the phrase is always there 

Almost every published commission carries the words per side, and they are load bearing rather than decorative. A position is opened once and closed once. Those two events are the two sides, and a rate quoted per side is charged in full at each of them. A single position that was opened and later closed therefore produces two commission entries in the account history, of equal size, at different times. Opening and closing taken together are conventionally called a round turn, and a round turn figure is simply the per side figure doubled.

The consequence is that one identical cost can be published as two quite different numbers. A firm quoting per side and a firm quoting round turn can be charging exactly the same amount and print figures that differ by a factor of two, with neither of them misstating anything. This is the single most common way a cost comparison goes wrong, and it goes wrong silently, because both figures are correct on their own terms. A commission figure without its basis attached is not really a figure.

The last row is the one worth holding on to. Nothing about the money changed between it and the first row. The basis changed, and the printed number moved with it. Arithmetic on cost only means anything once every figure involved has been put onto one basis, and the basis conventionally chosen for that is the round turn, on the reasoning that a position which has been opened is a position that will be closed.

How the charge is stated here 

YAL publishes a per lot rate on each of its commission priced MetaTrader accounts. The Raw Spread account states $3.50 per lot, per side. Raw Pro states $1.50 per lot, per side. Raw Pro+ states $1.00 per lot, per side. Each of those carries the per side wording, so the round turn charge on a single lot is double the printed figure in every case, by exactly the arithmetic above. On the account priced through the spread alone, the commission line reads $0, because nothing is charged as a fee there and the cost sits inside the quote instead.

Nothing in that paragraph says which arrangement produces a smaller total, and no commission figure on its own can answer that question, because a commission is only ever half of a pricing model. A rate is a term of an account, published alongside the spread it sits next to, and the two have to be read together or not at all. How the two are weighed against each other is the subject of the lesson that follows this one.

A commission priced on notional value 

The second convention charges against the money value of the contract rather than against the number of contracts. That value is the notional value: price multiplied by size, the same figure the profit and loss calculation runs on. A rate on this basis is quoted as an amount per unit of notional, conventionally per hundred thousand of it, and it is still charged per side. YAL does not price any account this way, so a reader meets this convention at other firms rather than here.

The difference between the two conventions is precise, and it is not a matter of presentation. A lot is a fixed convention: one standard lot of a currency pair is one hundred thousand units of the base currency whatever that currency is worth today, so a per lot rate produces the same charge on the same size for as long as the rate stands. Notional value is not fixed. It moves with the price of the instrument and it depends on the contract size the instrument is written on, so a rate applied to notional produces a different charge for the same number of lots as soon as the price is different.

Why the two figures cannot be converted into each other 

A per lot figure and a per notional figure sit in the same column of a comparison table, look like the same kind of number, and are not. Converting one into the other requires two further inputs: a price and a contract size. Both of those vary. Price moves continuously, so a conversion is out of date almost immediately. Contract size is a per instrument convention rather than a market wide constant, and the conventions genuinely differ: a currency pair is written on units of the base currency, a metal contract on a stated number of ounces, a shares contract on a stated number of shares, an index contract on a money amount per index point.

A converted figure is therefore true for one instrument, at one price, at one moment, and false for the same instrument an hour later. That is why the notional rate above is not restated per lot anywhere on this page, and it is a deliberate omission rather than an oversight. Restating it would produce a number that is not published anywhere, that moves with the market, and that a reader could reasonably repeat back as though it were a term of an account.

The comparison that does work runs in the opposite direction. Rather than converting a rate into a rate, both rates are converted into money for one specific trade: a stated instrument, a stated size, a stated price, both sides included. At that point the two bases produce two amounts in the same currency, and those amounts can be compared, because they are answers to the same question. That method, and the rest of the cost lines that belong beside it, are the subject of later lessons in this module.

Where the charge lands 

The debit is booked against the account balance rather than against the position, and the distinction shows up the first time a statement is read carefully. A position's own profit or loss figure is the difference calculation on the contract and nothing else, while commission appears separately as a transaction of its own. Some platforms then display a combined figure with commission already deducted and others keep the two lines apart, so one trade can be reported at two different figures on two screens without either report being wrong. Which convention a platform follows is a property of the platform, not of the trade.

Commission does not scale with time. It is charged on the transaction, once at each end of it, so a position opened and closed within a minute carries the same commission as an identical position held for a month. The cost that does depend on how long a position stays open is a different mechanism with a different name, and it has its own lesson later in this module. Commission is equally indifferent to the result: it is charged on a position that closed at a profit and on a position that closed at a loss, in the same amount, because it is a charge on the transaction and not on the outcome.

One further wrinkle belongs here rather than being discovered later. A commission is quoted in a currency and an account is denominated in a currency, and the two are not always the same one. Where they differ, a conversion sits between the rate and the balance, and that conversion carries a cost of its own. It is a separate mechanism, treated separately later in this module.

Where practitioners disagree 

The first disagreement is about which unit is the honest one to publish. One position holds that per side is the truthful unit, because it states the amount that is actually booked at the moment it is booked, and a round turn figure describes a second transaction that has not happened yet and might be a different size. The other holds that round turn is the truthful unit, because positions are not left open indefinitely and a per side figure invites a reader to plan against half the cost. Comparison tables are split between the two conventions, which is precisely why the same account can be found published at two figures, and why the basis matters more than the number beside it.

The second disagreement is about the bases themselves. One argument for pricing on notional is that it charges in proportion to the money value actually being transacted, rather than in proportion to a contract convention that differs from one instrument class to the next. The argument against is predictability: a per lot charge is known before the price is, while a notional charge is not fully known until the fill price is, and for anyone reconciling costs against a plan that is a real difference. Both bases are in wide use, neither has displaced the other, and the disagreement is about which property matters more rather than about any disputed fact.