Why there are no commissions in Forex Trading?

When trading stocks, futures or options an investor will use a broker who executes the trade and charge a commission for the service. Forex trading, however does not involve commissions. Forex trading firms are dealers not brokers – they assume market risk by acting as a counterparty to the trade. Forex dealers make money through the bid ask spread rather than commissions. This means that while the forex trader can never buy on the bid and sell on the offer as in other markets – and give up the spread when they enter a trade – they lose no profit to commissions in the event of a winning trade. The bid ask spread is measured in pips.

Trading involves substantial risk of loss and is not suitable for all individuals. Past Performance is not indicative of future results.

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