Spread Cost Calculator

The impact of spread on trade profitability is often overlooked. Going from a 3-pip spread to a 2-pip spread may not sound like much, and going from a 2-pip spread to a 1.8-pip spread may seem even less significant. But in both cases, depending on your trading style, the impact on profitability can be huge.

Use this calculator to quantify and compare the impact of spreads on various trade scenarios. (For an explanation of the math and some of the terms used, go to the Spread Cost Calculator help.)

The calculator is pre-populated with a scenario that might be typical for a conservative professional trader. We encourage you to substitute your own variables to explore different scenarios. For example, a more aggressive trader weighing the difference between 2 pips and 1.8 pips might enter the following values: Trading activity, 5 deals per day; Average deal leverage, 20:1; Past return on equity, 20%; Current spread, 2 pips; New spread, 1.8 pips.

Trading activity: deals
Avg. deal leverage: :1
Account equity:
Past return on equity: %
Current spread: pips
New spread: pips
See results below.
Number of trades per year =
Annual Trading Volume =
number of trades x leverage x account equity
Absolute Spread Cost =
 trading vol x spread 
Relative Spread Cost =
 absolute spread cost 
account equity
Return on equity =
with new spread
of account equity

The Commodity Futures Trading Commission (CFTC) limits leverage available to retail forex traders in the United States to 50:1 on major currency pairs and 20:1 for all others. OANDA Asia Pacific offers maximum leverage of 50:1 on FX products and limits to leverage offered on CFDs apply. Maximum leverage for OANDA Canada clients is determined by IIROC and is subject to change. For more information refer to our regulatory and financial compliance section.

This is for general information purposes only - Examples shown are for illustrative purposes and may not reflect current prices from OANDA. It is not investment advice or an inducement to trade. Past history is not an indication of future performance.

Your capital is at risk. Losses can exceed investment. Leverage trading is high risk and not for everyone - find out more