What is Commission? Commission Explained for Australian Traders

Commission is a fee a broker charges you each time you open or close a trade. Most Australian CFD and forex brokers charge it per side — meaning you pay once when you enter a trade and again when you exit it.

How Commission Works — A Practical Example

Say you open a CFD position on the ASX 200 worth A$10,000. Your broker charges A$3 per side. You pay A$3 to open the trade and A$3 to close it — a total of A$6 in commission for the round trip. That A$6 comes straight off your profit, or adds to your loss, regardless of how the trade performs.

Now imagine you make 20 trades in a month at the same size and rate. That’s A$120 in commission costs alone. For active traders running smaller accounts, these costs can meaningfully reduce returns — which is why comparing commission rates before choosing a broker matters so much.

Some brokers apply commission to share CFDs but not to forex or commodities like gold (XAU/USD). Others use a flat per-lot fee — for example, A$3.50 per 100,000 units traded on AUD/USD. Always check the broker’s product disclosure statement (PDS) to confirm exactly what applies to the markets you plan to trade.

Why Commission Matters for Australian Traders

ASIC requires all licensed brokers to disclose their fee structures clearly in their PDS and Financial Services Guide (FSG). This means Australian traders have a legal right to see commission rates before signing up — something not all offshore brokers guarantee. If a broker is ASIC-licensed and properly regulated, their commission structure must be transparent and consistent with what is advertised.

Commission also affects how you size your trades and manage risk. A A$3/side commission on a A$500 micro-account trade is a 0.6% cost before the market even moves. That makes it harder to be profitable on small, short-term trades. Traders running larger positions generally find commission a smaller percentage of their overall trade value — one reason professional traders often prefer commission-based accounts over wider-spread accounts.

Some ASIC-regulated brokers offer two account types: a commission-free account with a wider spread, and a commission account with a tighter spread. Depending on your trade frequency and size, one structure will almost always be cheaper than the other. Doing the maths before you commit to an account type is worth the effort.

Commission vs Spread — What’s the Difference?

Commission is a fixed fee charged per trade, while the spread is the difference between the buy and sell price built into every quote. A broker can profit from either or both. Commission-based accounts typically offer raw or near-raw spreads, meaning the spread itself is very tight — sometimes as low as 0.0 pips on AUD/USD — but the broker earns their margin from the per-trade fee instead. Spread-only accounts hide the broker’s markup inside the quoted price, so there is no separate line-item charge. For most Australian traders, commission is the more important factor to check if you trade frequently or in larger sizes, since it compounds with every trade.

What to Check When Comparing Brokers

• Per-side vs round-turn pricing: Confirm whether the advertised rate is per side or for the full round trip. A “A$3 commission” can mean A$3 total or A$6 total depending on the broker.
• Asset-specific rates: Commission often varies by instrument. Forex pairs, share CFDs, and commodities like oil may each carry different rates — check each market you plan to trade, not just the headline figure.
• Minimum commission thresholds: Some brokers set a minimum fee per trade. If you trade small sizes, a A$7 minimum commission on a A$500 trade is a 1.4% cost before the market moves.
• Commission on ASIC-regulated platforms: Brokers like IC Markets and Pepperstone are ASIC-licensed and publish their commission schedules publicly — both offer raw spread accounts with commission from around A$3.50 per side on forex, making them worth benchmarking against any broker you are considering.
• Volume discounts: High-frequency traders should ask whether the broker offers tiered commission rates as trading volume increases. This can make a meaningful difference to overall costs over a month of active trading.

If you are new to trading costs and want to understand how commission interacts with leverage and margin, our CFD beginner guide walks through the full cost structure in plain English.

Trading CFDs carries significant risk. 70–80% of retail accounts lose money. ASIC regulated. We may earn commission via links.