Module 3: Rebates explained · Lesson 10 of 11
How rebates lower your net cost
3 min read
A rebate lowers your net cost by returning part of what you pay on every lot. To see the effect, work out your gross cost per lot from the spread and commission, then subtract the rebate.
The formula
Net cost per lot = spread cost + commission + swap − rebate
Worked example: one lot
Example: These figures are illustrative. You trade EUR/USD on a raw account with an average spread of 0.3 pips, $7 round-turn commission per standard lot and no overnight holds. Your rebate is $2.50 per lot. Spread cost is 0.3 × $10 = $3, so gross cost is $3 + $7 = $10 per lot. Subtract the $2.50 rebate and your net cost is $7.50 per lot.
That is a 25% reduction in what each lot costs you.
Worked example: one month
| Lots per month | Gross cost | Rebate received | Net cost |
|---|---|---|---|
| 10 | $100 | $25 | $75 |
| 40 | $400 | $100 | $300 |
| 80 | $800 | $200 | $600 |
The more you trade, the larger the amount returned in dollars, though the percentage saving per lot stays the same.
Rebates on a standard account
Rebates can apply to standard (spread-only) accounts too. If your all-in spread costs $12 per lot and you receive an illustrative $4 rebate, your net cost is $8. This is why it is worth comparing net cost across account types, not just gross cost.
Rebates and break-even
Lower net cost brings your break-even point closer. With a net cost of $7.50 per lot instead of $10, your trades need to move less in your favour before they cover their costs. For a standard EUR/USD lot, that is 0.75 pips instead of 1 pip.
Tip: Keep a simple monthly record of lots traded, gross costs and rebates received. It makes your real cost of trading clear.
Risk: A rebate reduces cost; it does not create profit on its own. If your trades lose more than you get back, you still lose money overall.
Key takeaways
- Net cost per lot is spread plus commission plus swap, minus the rebate.
- Rebates scale with volume, so the dollar amount grows as you trade more lots.
- Lower net cost moves your break-even point closer.
- Compare net costs across brokers and account types, not just headline spreads.
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