All-in cost

A position is charged in more than one way, and the elements are quoted in different units, which is what makes them hard to compare. The spread is paid once across the round turn, because a position opens on one side of the quote and closes on the other. Commission is charged per side or per round turn, per lot or on notional value. Financing accrues for every night the position remains open. A currency conversion applies wherever the result does not arrive in the account currency.

Adding them requires converting each into the same unit, either an amount of money on a stated position size or a distance in the price. Doing that is the only way two pricing models can be compared at all: an account quoting a raw spread with a commission and an account quoting a wider spread with no commission cannot be ranked on spread alone, and comparing them on commission alone reverses the answer. The comparison is only meaningful once both are expressed as one number on the same position.

Two things distort the figure. Quoted spreads are typically averages rather than floors, and they widen around scheduled data and at the boundaries between sessions, so a cost calculated at a quiet moment is not the cost that applied at a busy one. And financing is the only element that grows with time, so the ranking of two accounts can invert depending on how long a position is held. Practitioners also disagree about whether slippage belongs in an all in cost at all, since it is not a charge, runs in both directions, and is a property of the market as much as of the provider.