When choosing the best broker for your trading sessions, it is always recommended to check the cost of trading to choose the brand that offers the most cost-effective trading conditions. At Pepperstone, traders are able to trade numerous Forex and CFD instruments, with low commission rates and tight spreads offering a very low cost of trading. In this article, we will cover all trading as well as non-trading fees that may be applied to your Pepperstone account. If you want to learn the overall cost of trading with this broker, we suggest you continue reading.
Pepperstone Trading Costs
Whenever you open an account with Pepperstone, you can start with a Demo account, allowing you to explore real-time trading markets without risking any real money. As for the Live account options at Pepperstone, traders can choose between Standard and Razor account variations. While the two account versions share quite a few similarities when it comes to contract sizes, supported currencies, and leverage, the two accounts follow different pricing models.
The Standard account of Pepperstone follows a spread-only pricing model, charging only a spread whenever you buy or sell a currency pair or another tradable asset. You can trade major Forex pairs with spreads starting from 1 pips, with zero commissions attached to your trades.
While the Standard account offers somewhat competitive prices, you can enjoy even lower trading costs with the Razor account option. While there is a small commission of $3.50 per lot traded on each side of the trade, the Razor account offers spreads on major Forex pairs that can start at 0.0 pips.
| Razor Account Roundtrip Commission Rates Based on Account Currency | |||
|---|---|---|---|
| Base Currency | Per Standard Lot | Per Mini Lot | Per Micro Lot |
| USD | $7 | $0.7 | $0.07 |
| EUR | €5.20 | €0.52 | €0.052 |
| GBP | £4.50 | £0.45 | £0.045 |
| CHF | CHF 6.60 | CHF 0.66 | CHF 0.066 |
To help you understand the true cost of trading Forex crosses with the Standard and Razor accounts at Pepperstone, we would like to give an example of trading the same pair with each of the two accounts available to retail traders. For our example, we will take a look at a standard lot trade of EUR/USD, where a single pip movement is equal to $10. To make calculations earlier to understand, we will consider that the trade opens and closes at the same price point.
At the time of writing this review, the average spread on EUR/USD for the Standard account is 1 pip, with zero commission attached to the trade. Meanwhile, the average spread on the same currency pair traded with a Razor account is 0.1 pips, with a $3.50 commission applied to each side of the trade of one lot. That would mean that the trading cost will be something like that:
Standard Account:
Spread: 1 pip
Total Cost: 1 x $10 = $10 per side or $20 for a round-trip trade
Razor Account:
Spread: 0.1 pips
Spread Cost: 0.1 x $10 = $1 per side
Commission: $3.50 per side
Total Cost: ($1)x2 + ($3.50)x2 = $2 + $7 = $9 for a round-trip trade
As you can see, even though you will pay a commission for trading the EUR/USD pair with the Razor account option at Pepperstone, the final cost of the trader is significantly lower than the one offered on the Standard account due to the big difference in the spread values.
Below, we have provided tables with the total cost per trade per side on popular Forex pairs. We have based the calculations on the current spreads offered on the Standard and Razor accounts, providing the cost for a micro lot as well as for a trade of a standard lot.
| Average Spread Costs with Standard Accounts | ||||
|---|---|---|---|---|
| Currency Pair | Spread (in pips) | Commission per side | Cost per Micro Lot | Cost per Standard Lot |
| EUR/USD | 1 | $0 | $0.1 | $10 |
| USD/JPY | 1.4 | $0 | $0.905 | $9.046 |
| EUR/GBP | 1.2 | $0 | $0.149 | $14.90 |
| GBP/USD | 1.3 | $0 | $0.13 | $13 |
| AUD/USD | 1.2 | $0 | $0.12 | $12 |
| USD/CAD | 1.3 | $0 | $0.899 | $8.99 |
| USD/CHF | 1.3 | $0 | $0.1429 | $14.29 |
| USD/CNH | 8.1 | $0 | $0.1110 | $11.10 |
| NZD/USD | 1.4 | $0 | $0.14 | $14 |
*All currency pairs’ trading cost is expressed in USD
| Average Spread Costs with Razor Accounts | ||||
|---|---|---|---|---|
| Currency Pair | Spread (in pips) | Commission per side | Cost per Micro Lot | Cost per Standard Lot |
| EUR/USD | 0.1 | $3.50/$0.035 | $0.045 | $4.50 |
| USD/JPY | 0.3 | $3.50/$0.035 | $0.0544 | $5.43844 |
| EUR/GBP | 0.2 | $3.50/$0.035 | $0.0598 | $5.98 |
| GBP/USD | 0.3 | $3.50/$0.035 | $0.065 | $6.50 |
| AUD/USD | 0.2 | $3.50/$0.035 | $0.055 | $5.50 |
| USD/CAD | 0.3 | $3.50/$0.035 | $0.0557 | $5.57 |
| USD/CHF | 0.3 | $3.50/$0.035 | $0.0677 | $6.77 |
| USD/CNH | 7.1 | $3.50/$0.035 | $0.01317 | $13.17 |
| NZD/USD | 0.4 | $3.50/$0.035 | $0.075 | $7.50 |
*All currency pairs’ trading cost is expressed in USD
Pepperstone Overnight Funding Costs
While intraday traders can benefit from trading with each account type offered by Pepperstone, there are also those who prefer to benefit from receiving interest on positions that remain open overnight. It should be noted that this interest, also known as a swap rate, can be also charged for holding your positions opened overnight, depending on whether you have gone long or short with your trade.
While swap rates are floating as they depend on interbank interest rates and other market conditions, we have provided a table with the current swap rates that apply to trades of popular currency pairs. Keep in mind that since the Forex market does not operate on weekends and swaps are not charged/paid, on Wednesdays swap rates are tripled.
While you can easily see the current swap rates applicable to each tradable instrument by accessing the list of tradable instruments on each of the trading platforms that Pepperstone offers to its clients, it is also useful to know how swaps are calculated by the broker. For Forex and Metals, Pepperstone calculates swap rates following the formula below:
Daily swap charge / credit = Single Point x (Size of the trade or the notional amount of the trade x tom-next rate*)
*Pepperstone resorts to data provided by top-tier global investment banks to determine its tom-next rates.
| Swap Rates on Popular Forex Pairs | ||||
|---|---|---|---|---|
| Symbol | Base Currency | Volume in Lots | Pair Swap Long | Pair Swap Short |
| EUR/USD | USD | 1 | 0.61000 | 0.20000 |
| USD/JPY | USD | 1 | -0.710 | -2.130 |
| EUR/GBP | USD | 1 | 0.64000 | 0.21000 |
| GBP/USD | USD | 1 | 0.14000 | -0.36000 |
| AUD/USD | USD | 1 | 0.16000 | -0.11000 |
| USD/CAD | USD | 1 | -0.30000 | -0.92000 |
| USD/CHF | USD | 1 | -0.44000 | -1.21000 |
| NZD/USD | USD | 1 | 0.16000 | -0.12000 |
* Swap rates are expressed based on points adjustment format
Swap-Free Trading Costs at Pepperstone
Since traders who profess Islam are not allowed to pay or receive interest, Pepperstone offers residents of certain Muslim countries to open swap-free accounts. That means that they will not receive or be charged swap fees whenever their positions remain open overnight. While this type of account eliminates swap fees, traders who utilize swap-free trading will be charged so-called admin charges. This type of fee is charged whenever a trade placed via a swap-free account is held open for over 5 days.
Admin fees apply per 1 standard lot size and are deducted from the account balance of the trader. The admin fee applied to Forex and Metals trades made via swap-free accounts is $100 per lot traded.
The swap-free account option is available only to residents of Albania, Bangladesh, Burkina Faso, Bahrain, Brunei, Brunei Darussalam, Algeria, Egypt, Indonesia, Jordan, Kyrgyzstan, Kuwait, Morocco, Mauritania, Maldives, Malaysia, Niger, Oman, Pakistan, Qatar, Sierra Leona, Turkey, Uzbekistan, and Kosovo.
Standard accounts can also be Swap-Free, offering an average spread on EUR/USD of 0.77 pips. The trade size of a contract via a swap-free account at Pepperstone is a minimum of 0.01 lots and up to 100 standard lots. Zero commission is applied, just like with the regular Standard account at Pepperstone.
Pepperstone Non-Trading Costs
While we have discussed commissions, spreads, and other trading fees, we should also consider any non-trading charges that may apply while you trade with Pepperstone. You will be able to open your account with the broker for free, with Pepperstone’s account maintenance service also being free of any charge. While some brokers charge an inactivity fee, if your Pepperstone account has been dormant, meaning you have not used it for over 3 months, it will be archived, with no inactivity fee being charged.
Whenever it comes to funding your trading account, you will be able to choose from several payment solutions, the availability of which may be country-specific in some cases. Conveniently enough, Pepperstone charges no fees on deposits, allowing traders to use the entire amount they have deposited for their trades. When it is time to withdraw one’s funds, the broker also applies no additional fees, making the whole payment process at Pepperstone extremely cost-effective.
All customers of Pepperstone also may have access to a VPS (Virtual Private Server) service, which is covered entirely by the broker as long as traders meet certain conditions. To be able to use the VPS hosting service of Pepperstone, traders must accumulate a trading volume of $1,000,000 or more within a period of 60 days. To be able to continue the use of Pepperstone’s free VPS service, traders must keep meeting the minimum trading volume requirement.
| Pepperstone Non-Trading Costs | |
|---|---|
| Deposit Fees | Free |
| Withdrawal Fees | Free |
| Account Opening Fee | Free |
| Inactivity Fee | None |
| VPS Hosting Subscription | Free for traders who maintain trading volume of USD 1,000,000 or more in a period of 60 days |
Closing Thoughts on Pepperstone Fees
Pepperstone is a well-respected trading broker, offering extremely competitive trading conditions across multiple account options. Whether you opt for the Standard account or the Razor account option, you can enjoy a very low trading cost on a variety of Forex pairs and plenty of CFD instruments. We recommend checking the overall cost of both account types available at Pepperstone and also consider swap rates if you plan on keeping your positions open overnight.
The great thing about trading with Pepperstone is that the broker charges zero non-trading fees. That means there are no deposit and withdrawal surcharges, no inactivity fees, or any other type of additional charges that may cost you additional funding.
