Why Spreads Are Only Half the True Cost Story
Slippage, rejection rates and financing quietly outweigh the headline spread on most retail accounts.
Rami HaddadHead of Execution6 min read
The spread is the number every broker quotes and the one traders compare. It is also the smallest part of what a position actually costs. The expensive parts are quieter: the price you are filled at versus the price you clicked, the orders that are rejected and re-quoted, and the financing charged to hold overnight.
The three costs nobody advertises
- Slippage — the gap between the shown price and the filled price, widest exactly when you most want out.
- Rejection and re-quote — an order that does not fill at all, so the real cost is the move you missed.
- Financing — the daily charge to hold a leveraged position, which compounds on anything held for days.
A 0.1-pip spread advantage is real, but it is measured in cents on a standard lot. A single percent of slippage on the same lot dwarfs it. Comparing brokers on spread alone optimises the cheapest line item while ignoring the two that decide the bill.
You do not trade the spread. You trade the fill — and the fill is where the money actually moves.
BBCorp Execution Desk
How to measure what you are really paying
Pull your own fills. For a sample of orders, compare the price at the moment you sent them against the price you were filled at, and total it. That number, not the advertised spread, is your execution cost — and it is the one worth shopping on.