E-Trade is a popular online brokerage firm that offers a variety of financial services, including forex trading. Forex or foreign exchange trading involves buying and selling different currencies to make a profit. E-Trade offers access to the forex market through its platform, but the question is, what does E-Trade charge per forex trade?
E-Trade offers two types of forex trading accounts, namely the standard account and the advanced account. The standard account is suitable for beginner traders, while the advanced account is designed for experienced traders. The fees for forex trading on E-Trade vary depending on the account type, the currency pair traded, and the trading volume.
For standard accounts, E-Trade charges a flat fee of $0.10 per 1,000 units of the base currency traded. For example, if you trade 10,000 units of the EUR/USD currency pair, E-Trade will charge you $1. This fee applies to all currency pairs except the Japanese Yen (JPY), which has a lower unit size. For JPY currency pairs, the fee is $0.01 per 1 unit.
In addition to the flat fee, E-Trade also charges a spread on each forex trade. The spread is the difference between the bid price and the ask price of a currency pair. The bid price is the price at which you can sell a currency pair, while the ask price is the price at which you can buy a currency pair. The spread is essentially the cost of trading forex on E-Trade.
The spread on E-Trade varies depending on the currency pair traded and the trading volume. The spread for major currency pairs such as EUR/USD and USD/JPY is typically low, ranging from 1 to 3 pips. A pip is the smallest unit of price movement in forex trading. For minor currency pairs, the spread can be higher, ranging from 3 to 5 pips or more.
For advanced accounts, E-Trade charges a different fee structure for forex trading. Instead of a flat fee, E-Trade charges a commission based on the trading volume. The commission ranges from $25 to $50 per million units of the base currency traded, depending on the volume. The more you trade, the lower the commission rate.
In addition to the commission, E-Trade also charges a spread on each forex trade for advanced accounts. The spread varies depending on the currency pair traded and the trading volume, similar to the standard account.
It is essential to note that E-Trade charges other fees besides forex trading fees. These fees include account maintenance fees, inactivity fees, and wire transfer fees. It is important to read and understand the fee schedule on E-Trade’s website before opening an account.
In conclusion, E-Trade charges a flat fee and spread for forex trading on standard accounts, while the advanced account charges a commission and spread. The fees vary depending on the currency pair traded, the trading volume, and the account type. It is important to understand the fees and other charges associated with forex trading on E-Trade before opening an account.
