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Conversion fee

The markup a broker applies when converting a trade result, dividend or deposit from one currency into your account currency, usually a percentage of the amount.

Conversion is rarely done at the mid-rate. Brokers typically apply a spread of anywhere from a few basis points to around 1% on each side, and it is charged silently as part of the converted figure rather than as a separate line item.

It applies more often than people expect: on every trade in a pair that does not include your account-currency, on swap charges in that pair, on CFD dividends, and on deposits and withdrawals in a different currency. Traders who work crosses all day pay it on every single result.

Some brokers publish the rate applied on the trade confirmation, which is the only reliable way to see what you paid. Multi-currency wallets, where each currency is held separately and converted only on request, avoid the per-trade charge.

Example: a GBP 500 profit is converted at a mid of 1.2700 less a 0.5% markup, so 1.2637. You receive $631.85 instead of $635.00, a $3.15 cost that does not appear anywhere on the statement as a fee.

Related: account-currency, mid-rate, markup, commission-vs-spread

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

Bid-ask spread in an order bookSell orders stacked above buy orders with a gap between the best of each.SELLERS (asks)50.0690050.051,40050.0460050.011,10050.002,30049.99800spread = 0.03BUYERS (bids)
The bid-ask spread. Buy orders sit below, sell orders above, and the gap between the best bid (50.01) and best ask (50.04) is the spread you pay to cross. Bar length shows the size resting at each price.

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