Costs, Spreads & FeesRound TripPer Round Turn
Round Turn
A complete trade cycle of opening and closing one position, used as the unit for quoting commission.
What Round Turn means
A round turn is the full life of a trade: one entry and one exit. It is the standard unit for quoting commission on futures and on raw-spread forex accounts, because the trader necessarily incurs the cost twice. The alternative convention quotes per side, meaning per execution, so a per-side figure must be doubled to compare with a round turn figure. Failing to normalise the two is the single most common error in comparing broker cost schedules, and it makes an offer look half as expensive as it is.
The concept extends beyond commission to any per-execution cost. The spread, by contrast, is conventionally described once but is effectively paid on the round turn as well, since the position opens at the ask and closes at the bid. Expressing everything on a round turn basis is therefore the cleanest way to build a per-trade cost figure that can be compared against a strategy's average gross profit.
For strategies with high turnover the round turn cost is the number that decides viability. A scalping approach targeting five pips of gross profit that pays roughly one pip equivalent per round turn is surrendering a fifth of its edge before slippage; the same cost is negligible for a swing trade targeting two hundred pips. This is why cost sensitivity should be assessed against the strategy's typical trade size rather than against the account balance.
Worked example
A broker quoting USD 3.50 per side per standard lot is charging USD 7 per round turn, which combined with a 0.2 pip raw spread makes a total of about USD 9 to open and close one lot of EUR/USD.
Related terms
- CommissionAn explicit per-trade or per-lot fee charged by the broker in addition to, or instead of, a marked-up spread.
- Raw SpreadThe underlying market spread passed to the client without broker markup, normally paired with a commission.
- Total Cost of TradingThe complete cost of a trade or account, combining spread, commission, swap, slippage and non-trading fees.
- RebateA partial refund of spread or commission paid back to the trader, usually per lot traded and often via an introducing broker.
- Standard LotA position of 100,000 units of the base currency, the benchmark trade size in forex.
Frequently asked questions
What does Round Turn mean in forex trading?
A complete trade cycle of opening and closing one position, used as the unit for quoting commission.
How does Round Turn work in practice?
The concept extends beyond commission to any per-execution cost. The spread, by contrast, is conventionally described once but is effectively paid on the round turn as well, since the position opens at the ask and closes at the bid. Expressing everything on a round turn basis is therefore the cleanest way to build a per-trade cost figure that can be compared against a strategy's average gross profit.
What is an example of Round Turn?
A broker quoting USD 3.50 per side per standard lot is charging USD 7 per round turn, which combined with a 0.2 pip raw spread makes a total of about USD 9 to open and close one lot of EUR/USD.
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