I’m trying to understand my actual trading cost and it’s more confusing than I expected. When a broker advertises spreads, that’s my cost, right? And then rebates come back to me separately? Or does it work differently?
I’m seeing brokers mention things like 0.8 pip spreads and then GlobeGain rebates on top of that. But I’m not entirely clear on whether the rebate is calculated before or after the spread, or if they’re completely separate calculations.
What I really want to understand is: if I trade one lot of EUR/USD with a 0.9 pip spread and a 0.3 pip rebate available, what’s my actual net cost? Is it 0.6 pips? Or is the rebate part of something else entirely?
Also, does this math change depending on the account type or the broker? I feel like I’m missing something obvious but I want to get this straight before I start trading with real money.
How do you actually calculate your real trading cost when you factor in both spreads and rebates?
Your real cost is spread plus commission minus rebate. That’s it.
Let’s say you trade EUR/USD with a 0.9 pip spread, no commission, and a 0.3 pip rebate through GlobeGain. Your net cost is 0.9 minus 0.3, which is 0.6 pips per side.
For one standard lot that’s $6 per trade. Do this math for every trade and you understand your true cost of trading.
The rebate isn’t a separate thing. It’s money back directly to your account, usually weekly or monthly depending on your broker. It reduces your total cost.
Account type matters. ECN accounts have lower spreads but higher commissions. Micro accounts have higher spreads but lower leverage. Calculate the real cost for the specific account type you’re considering before opening it.
I was confused about this too at first. Here’s how I learned to think about it.
Spread is what the broker charges you to enter a trade. Rebate is what they give back. So if the spread is 1 pip and rebate is 0.3 pip, you actually paid 0.7 pips.
But this changes based on your broker and account type. Some brokers have tighter spreads but charge commission instead. You have to calculate both to get the real number.
GlobeGain’s rebates came to my account monthly. That money offset some of my trading costs, which was helpful when I was learning and losing money on trades.
The key insight: don’t just compare advertised spreads. Calculate your actual total cost per pair you trade.
Think of it like this: spread is what you pay, rebate is what you get back.
If a broker has a 1 pip spread and offers a 0.3 pip rebate, your real cost is 0.7 pips per trade.
The rebate comes back to your account separately, usually on a schedule from your broker or rebate service. It’s not instant but it’s real money.
Just calculate spread minus rebate equals your actual cost. That makes it simple to compare brokers.
Real cost equals spread minus rebate. That’s your actual cost per trade.
Takes a minute to think through but once you calculate it once you understand how it works forever.
I made a simple spreadsheet for the pairs I trade most often. Plug in the spread and rebate for each broker and it shows me the real cost side by side. Took the confusion out of comparing.
After that I realized my first broker was way more expensive than I thought when I factored in the rebate I could have been using.