The spread in your terminal is rarely the spread your broker pays. Most brokers take a raw price from their liquidity providers and add a slice on top before it reaches your screen. That slice is the markup, and for a great many brokers it is the main way they earn from your trading. You never see a line item for it — the markup is baked into the buy and sell prices you are quoted, which is exactly why it pays to understand.
What it is
The raw spread is the gap between the best bid and the best ask that a broker's liquidity providers offer — often a few tenths of a pip on a major pair. The markup is a fixed amount the broker adds to that gap. If the raw spread on EUR/USD is 0.2 pips and your broker quotes you 1.0 pips, the markup is 0.8 pips. You pay the whole 1.0, the provider keeps 0.2, and the broker takes the difference.
How it works
A broker running this model sits between you and the market. It receives a raw feed, widens both sides of the quote, and passes the wider price to you: buy a little higher, sell a little lower. The markup is usually constant per pair, so it stays roughly the same whether the market is calm or busy — though some brokers widen it further at rollover and around news.
This is different from a commission account, where the broker shows you something close to the raw spread and charges a separate, visible fee per lot. Same income, two ways of collecting it: one hidden in the price, one printed on your statement.
A wider spread is not proof of a rip-off, and a tight one is not proof of a bargain. What matters is the total cost to trade — markup plus commission plus swap — measured across the trades you actually place.
A worked example
On a standard lot (100,000 units), one pip is worth about £8.
Say your broker adds a 0.8 pip markup on EUR/USD and you run an EA that trades 15 standard lots of volume a day. You cross the spread once per round turn, so the markup alone costs 0.8 × £8 = £6.40 per lot, or £96 a day. Over a 20-day trading month that is £1,920 — money that never shows up as a charge because it was already inside the price.
Now compare two accounts on the same strategy: a 1.2 pip "commission-free" account, and a 0.3 pip account charging £5 per lot round turn. The second looks like it has a fee. Run the sums and it is usually cheaper.
How to spot it
- Compare your typical spread against the raw interbank spread for the same pair at the same time of day.
- Check whether the broker offers a raw-spread-plus-commission account. The gap between that and the "commission-free" account is roughly the markup.
- Watch how the spread behaves at rollover and around news. Sharp widening tells you the markup is variable.
The Karnek note
Karnek reads the fills on your live account, so the spread you actually paid shows up in the numbers rather than the one advertised on the broker's site. It watches, read-only, and can never place or close a trade.
Written and reviewed by the Karnek Research team. Last updated August 2026.
Educational content only - not financial advice. Past performance does not predict future results. Trading carries significant risk.