FX broker has multiple ways to generate revenue from the trades you place, and not all of them are immediately visible.
Spreads are the most common revenue stream
Every time you open a position, you're buying at one price and selling at another. That difference is called the spread. Even when a broker says they offer "commission-free" trading, they’re likely making their money on that spread. For example, if the EUR/USD pair is quoted at 1.1000/1.1002, that two-pip spread goes to the broker.
This is how most FX broker platforms make money on standard accounts. The wider the spread, the more they earn. Of course, wider spreads can also make trading more expensive for you, which is why many experienced traders prefer brokers that offer raw spreads with transparent commissions.
Commissions on certain account types
While some brokers wrap their costs into the spread, others charge a fixed commission per trade. This is common with ECN or raw spread accounts, where traders benefit from ultra- tight spreads, often starting at 0.0 pips.
In these setups, the FX broker earns a small fee on each transaction, typically quoted per round turn (meaning both the open and close of a trade). For high-frequency traders, these fees can add up quickly but the trade-off is better pricing and transparency.
Swap fees on overnight positions
If you hold trades past the daily market rollover (usually 5 p.m. New York time), you may be charged or credited a swap, also known as a rollover fee. This fee is based on the interest rate differential between the two currencies in your pair, and brokers either pass it on or take a cut.
An FX broker can adjust these swap rates depending on how they receive them from liquidity providers. Some mark up the rate slightly, profiting from the interest differential without making it obvious. For traders who hold positions long-term, these charges can become a significant part of overall trading costs.
Internal dealing desks and the B-book model
Not all brokers send your trades directly to the market. Some operate using what’s called a B-book model, where they take the opposite side of your trade. In other words, when you lose, they win.
While this might sound predatory, it’s a common practice, and not inherently unethical, many FX broker firms use risk management tools to hedge their exposure. However, the concern arises when brokers lack transparency and create environments that encourage overtrading or leverage misuse for their own gain.
Add-ons, platform fees, and extras
Beyond trading, brokers can make money through value-added services. Some charge for premium analytics, exclusive webinars, or third-party integrations. Others may offer advanced platforms with subscription models or sell access to proprietary tools.
Even if the core trading experience is low-cost, an FX broker may generate revenue by upselling extras. This is not a bad thing as long as the services provide real value. Just be cautious about hidden charges or unnecessary upsells that don’t fit your strategy.
It’s all about volume and flow
Whether through spreads, commissions, swaps, or B-book execution, the common thread is volume. The more you trade, the more opportunities your broker has to earn. That’s why brokers want active clients, they benefit from each transaction regardless of outcome.
Understanding how your FX broker makes money isn’t about being suspicious. It’s about being informed. When you know the revenue structure, you can better assess trading conditions, spot red flags, and choose a broker whose model aligns with your goals.
At the end of the day, transparency is key. The best brokers are upfront about how they earn, because they know that informed traders are long-term clients.
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