AvaTrade, a globally recognized Forex and CFD broker, offers a wide range of assets with its primary source of revenue being the bid-ask spread. This comprehensive review aims to educate traders on the trading and non-trading costs associated with AvaTrade before opening live accounts. The transparent spread structure allows traders to stay informed of all expenses, enabling them to manage their account balances easily and stress-free. The team at BestBrokers has compiled information about AvaTrade’s brokerage fees, with the most significant being spreads, overnight financing rates, and other non-trading fees.
AvaTrade Trading Costs
AvaTrade supports two main account types: Standard Account and Professional Account. The first one is suitable for retail trades, whereas the second one is reserved for qualifying traders who meet the broker’s requirements. Pro account holders at AvaTrade enjoy tighter spreads and higher leverage limits.
In addition to the Standard and Professional accounts, the broker offers a spread betting account for UK and Irish traders, an Islamic account, compliant with Sharia Law, and an AvaOptions account, suitable for adequately experienced traders. All account types offer options for micro, mini, and macro trading, depending on the lot sizes traders are going to trade with. As for the supported trading platforms, customers of the brand can choose between MT4, MT5, the proprietary AvaOptions, and Copy Trading platforms.
In this section, we will focus on the trading costs of the Standard and Pro accounts with AvaTrade. The Standard Account features a spread-based pricing model that incorporates all trading costs into the spread value. Spreads are fixed, enabling traders to get the same price no matter when they trade.
The Professional Account offers tighter spreads on account of Pro traders’ greater trading volume and portfolio size. No commissions are charged as well, except where otherwise stated.
To clarify the concept of trading costs associated with AvaTrade’s Standard and Pro Accounts, let us examine a trade of 1 lot in EUR/USD, keeping in mind that one pip is valued at $10 and assuming the trade opens and closes at the same price. Presently, AvaTrade’s spread for the EUR/USD pair is 0.9 pips for Standard Account holders and 0.6 pips for Pro Account holders.
AvaTrade Standard Account:
Spread: 0.9
Total Cost: 0.9 x $10 = $9.00 per side or $18.00 roundtrip trade of 1 lot
AvaTrade Pro Account:
Spread: 0.6
Spread Cost: 0.6 x $10 = $6.00 per side or $12.00 roundtrip trade of 1 lot
This side-by-side evaluation allows us to conclude that AvaTrade’s Pro Account offers tighter spreads. To be eligible for a professional account, traders must meet at least two of three main criteria regarding their trading activity, relevant experience in the financial services sector, and their instrument portfolio’s size. That being said, Pro Account holders must waive several protection mechanisms, such as negative balance protection, that may lead to losing more funds than their initial deposit. The risks are further enhanced by the fact that Retail traders can use a maximum allowable leverage of 1:30, whereas Pro traders can use leverage of 1:400.
In the first table below, traders can check the Standard account spreads for several popular Forex pairs plus the costs for Micro and Standard lot trades.
| Average Spread Costs with AvaTrade Standard Account | ||||
|---|---|---|---|---|
| Currency Pair | Spread (in pips) | Commission per side | Cost per Micro Lot | Cost per Standard Lot |
| EUR/USD | 0.9 | $0 | $0.09 | $9 |
| USD/JPY | 1.3 | $0 | $0.085 | $8.52 |
| EUR/GBP | 1.2 | $0 | $0.149 | $14.97 |
| GBP/USD | 1.3 | $0 | $0.13 | $13 |
| AUD/USD | 1.1 | $0 | $0.11 | $11 |
| USD/CAD | 1.8 | $0 | $0.125 | $12.53 |
| USD/CHF | 1.3 | $0 | $0.143 | $14.39 |
| NZD/USD | 1.4 | $0 | $0.14 | $14 |
*Currency pairs’ trading cost is expressed in USD
The second table shows the respective spreads and calculations for the same Forex pairs with AvaTrade’s Pro Account.
| Average Spread Costs with AvaTrade Pro Account | ||||
|---|---|---|---|---|
| Currency Pair | Spread (in pips) | Commission per side | Cost per Micro Lot | Cost per Standard Lot |
| EUR/USD | 0.6 | $0 | $0.06 | $6 |
| USD/JPY | 1.1 | $0 | $0.072 | $7.21 |
| EUR/GBP | 0.9 | $0 | $0.112 | $11.22 |
| GBP/USD | 0.9 | $0 | $0.09 | $9 |
| AUD/USD | 0.8 | $0 | $0.08 | $8 |
| USD/CAD | 1.5 | $0 | $0.104 | $10.44 |
| USD/CHF | 0.9 | $0 | $0.099 | $9.96 |
| NZD/USD | 1.3 | $0 | $0.13 | $13 |
*Currency pairs’ trading cost is expressed in USD
AvaTrade Overnight Funding Costs
Overnight funding costs, commonly known as swap rates or rollover fees, are the interest payments traders either earn or pay for holding a position overnight. These costs are particularly significant in foreign exchange and CFD trading. If a swap fee is negative, the trader receives a payment from the broker instead of incurring a cost. However, it’s important to understand that negative swap fees are not guaranteed and can vary based on market conditions.
All brokers should provide information on the swap rates applicable to keeping positions overnight. AvaTrade is not an exception and provides this information in a clear and transparent manner, along with a video tutorial dedicated to swap rates and the way they are calculated.
As the broker explains in the video tutorial, if a trader keeps an AUD/CHF trade open overnight, they will earn a positive overnight sum, as the AUD interest rate is higher than the CHF interest rate. Generally, after buying currencies against the CHF, traders would receive a positive swap.
However, for the most part, keeping a position overnight would result in a charge on a trader’s account. Traders should note that overnight swaps usually take effect after 10.00 p.m. GMT.
While AvaTrade automatically calculates the premiums for keeping positions overnight, the broker provides traders with the formula to make the calculations by themselves:
Premium = Trade amount x Premium or interest x Number of Days / 360 days
In the table below, traders can check the swap rates for long and short positions kept overnight for several popular Forex pairs.
| Swap Rates on Popular Forex Pairs (standard lot size) | ||||
|---|---|---|---|---|
| Symbol | Base Currency | Volume in Lots | Pair Swap Long in % | Pair Swap Short in % |
| EUR/USD | USD | 1 | -0.0070% | 0.0009% |
| USD/JPY | USD | 1 | 0.0071% | -0.0191% |
| EUR/GBP | USD | 1 | -0.0076% | -0.0002% |
| GBP/USD | USD | 1 | -0.0033% | -0.0028% |
| AUD/USD | USD | 1 | -0.0069% | -0.0002% |
| USD/CAD | USD | 1 | -0.0017% | -0.0042% |
| USD/CHF | USD | 1 | 0.0050% | -0.0135% |
| NZD/USD | USD | 1 | -0.0048% | -0.0027% |
Swap-Free Trading Costs at AvaTrade
AvaTrade has added the Islamic Account type to the line of available account options. It is in full compliance with Islamic rules. By creating an Islamic account with AvaTrade, qualifying customers will not be charged daily swaps on Forex and CFD trades kept active overnight. However, they should note that trades kept open for more than five days will be charged swaps. This is an important limitation they should bear in mind when they consider opening Islamic accounts with AvaTrade.
Once they create their accounts with AvaTrade, Islamic traders should get in touch with the customer service team and apply for an Islamic account. Requests are typically processed within 1-2 business days.
When traders load the MT4/MT5 platform, they will be able to view the broker’s administration fees, which are charged in place of swap rates for overnight positions. The traditional swap rates will be converted into daily administration fees for each of the supported Forex trading instruments.
Typically, the spreads for Islamic account holders are wider compared to those available for Standard account holders. This is to compensate for the lack of swap fees on overnight positions. Additionally, brokers may charge a monthly administration fee that may vary from one company to the other.
Generally, Islamic accounts are subject to certain constraints, such as geographical restrictions (available for certain countries) and a limitation on the range of available assets for trading. Traders should take into consideration that at AvaTrade, cryptocurrency trading is not available to Islamic account holders. The same holds true for certain Forex instruments, such as RUB, MXN, TRY, and ZAR.
AvaTrade Non-Trading Costs
Essentially, the non-trading costs charged by brokers include deposit and withdrawal fees, account inactivity fees, and currency conversion fees. AvaTrade does not charge traders for depositing and withdrawing funds from their trading accounts. That being said, there may be transaction fees on behalf of the payment processor being used.
Account opening at AvaTrade is fee-free. However, customers of the broker should note that inactivity fees apply after a particular period of account non-use. After 3 consecutive months of inactivity, traders will be charged a fee of $/€/£50. If the account has been dormant for 12 consecutive months the inactivity fee would be $/€/£100. Account holders should note that these fees are subject to change.
Deposits and withdrawals made in currencies different from the account base currency are subject to a currency conversion fee of 0.5% of the amount.
| AvaTrade Non-Trading Costs | |
|---|---|
| Deposit Fees | Free |
| Withdrawal Fees | Free |
| Account Opening Fee | Free |
| Inactivity Fee |
|
| Currency Conversion Fee | 0.5% |
Closing Thoughts on AvaTrade Fees
In conclusion, AvaTrade stands out as a competitively priced Forex and CFD broker, catering to traders of all experience levels. The broker employs a commission-free pricing model, with the spread being the main compensation for its services for both the Standard and Pro accounts. Furthermore, AvaTrade’s distinguishing features, including its diverse range of trading platforms, robust fund security measures, and innovative risk management tools, solidify its position as a top-tier broker. By combining these advantages with its commitment to transparency and customer satisfaction, AvaTrade has established itself as a reliable and attractive option for traders seeking a comprehensive and secure trading experience.
