Author: Eduardo Montero
This article is about the Pepperstone broker, but we would like to address an aspect that we consider of utmost importance and that often determines whether or not to use the services of a broker, namely the commissions.
Therefore, throughout this post, we will detail each of Pepperstone ‘s commissions and fees, so that you know how they could affect you if you decide to use the services of this financial intermediary.
Now, before we get into the commissions, I want to show you a little information about this broker so that you have a complete overview of its features.
Main features of Pepperstone
Pepperstone is a financial intermediary that puts at our disposal a wide range of assets from different markets, such as Forex, Stocks, Indices, Commodities, among others.
It was founded in 2010 in Australia, so it has more than 10 years of experience offering brokerage services. In addition, throughout its history it has been incorporating licenses that respond to regulations of very prestigious entities, such as the UK FCA, the Australian ASIC, CySEC, BaFin, DFSA, CMA and SCB. It is therefore considered a reliable broker by many users worldwide. In this link you can see a compilation of the most relevant Pepperstone customer reviews.
It offers its clients the possibility to use leading trading terminals such as MetaTrader 4, MetaTrader 5, cTrader, and even connect your trading account with the innovative Trading View platform.
It also offers advanced tools for technical analysis and trade management, such as Smart Trader Tools, cTrader Automate, and Autochartist.
With this broker you will also have the possibility of automatic trading and social trading (only available in some countries).
Now that you know a little more about Pepperstone, let’s start warming up with a summary of their fees and commissions, and then later on we’ll look at the specific details.
The main fees and commissions you will have to deal with at Pepperstone are:
- Spreads when trading currency pairs, CFDs, and cryptocurrencies.
- Fixed commissions on Meta Trader Razor accounts and cTrader accounts.
- Swaps generated by holding one or more leveraged trades overnight.
- Exchange rate commission when depositing, withdrawing or trading in a currency other than the base currency of the account.
It’s important to know that Pepperstone’s spreads and swaps vary widely depending on the type of asset being traded, and even the type of account.
Pepperstone commissions and spreads
All commissions that are generated when using the services of any financial intermediary can be separated into two subgroups, those that are applied at the time you open, hold and close positions, known as ‘Operational Fees’, and those that are generated regardless of whether you trade or not, commonly known as ‘Non-Operational Fees’.
Fixed and variable commissions applied when trading, and spreads, are part of the category of operational fees.
Please see below for details of Pepperstone’s commissions and spreads for each of the markets and assets it offers.
Spreads are the most common type of commission you will find. It is the difference between the bid price and the ask price that the broker offers you when you decide to open a position, always giving you the higher price (ASK) when you want to buy, and the lower price (BID) when you want to sell.
For example, the image below shows the Bid price (ASK), Ask price (BID), and the difference (Spread) between them, for Pepperstone’s most popular assets.
The Meta Trader 4/5 spreads on Pepperstone are available with prices from various providers and sources to ensure you get the best prices at all times.
On Razor accounts these spreads can go to 0 at times of liquidity on currency pairs such as EUR/USD.
Knowing this, let’s now take a look at the minimum and average spreads for the main assets in each market.
In the case of indices, it is worth noting that you will be able to trade with fixed spreads during market opening hours, which means that whatever the volatility in that period of time you will know at all times the spread rate you will have to pay if you open a position.
Commissions by trading platform
On the MT5 Razor and MT4 Razor accounts, spreads are extremely low, reaching 0 in some cases, so when you trade Forex CFDs and Stocks on either of these accounts, Pepperstone will charge you a fixed round trip commission for each lot traded.
This commission is around 3.5 AUD each way, or 7 USD in total for each lot traded on the Forex market, in the case of trading stocks and ETFs the commission will be 0.02 USD per share.
The following two images show this commission for some account currencies, in each account type:
For cTrader accounts, the commission will be $6 USD round-trip, or $3 USD each way.
But not only does it differ from the previous ones in that it is a lower value, but it will always be in USD, so if the currency of your account is different, this base cost will be converted to the currency in question, at the current exchange rate.
Swap fees at Pepperstone
Swap fees, also known as rollover fees, are another fee that falls under the category of ‘Operational Fees’, as these are generated when you hold one or more positions open for days, or simply from one session to another.
They are a positive or negative cost, i.e. you pay or get, for rollover, which is the result of leveraged trading (trading with borrowed money).
At Pepperstone, rollover rates are set at the regional benchmark interest rate for the underlying product, plus (or minus) a fixed cost of 2.5%.
In the case of Forex, each currency pair has its own swap rate and is measured with a standard lot size of 1 lot (100 000 units of the base currency).
Another thing to note is that these fees are charged daily, including weekends, but in addition Pepperstone may charge (or pay) a triple swap fee to traders who hold trades after 17:00 (New York time):00 hours (New York time) on Wednesday, as these trades will be treated as if they were executed on Thursday, and since the banks’ settlement date is in two days’ time, this is delayed until Monday, meaning that you will be charged (or paid) for funding the amount for the two days over the weekend.
To view the swap rates for each of Pepperstone’s assets you can view the broker’s website (https://pepperstone.com/) or access their information manually from each of the trading platforms, either MetaTrader or cTrader, always bearing in mind that these rates are indicative rates and are subject to change depending on market volatility.
It is worth clarifying that cryptocurrency swaps are determined in points, and are based on the closing price of the relevant index currency and the applicable annual percentage rate. The final swap fee payment is subject to the closing price or corresponding selling price at the time of the rollover.
Foreign exchange fee
The foreign exchange fee is considered a ‘non-operating’ fee, as it is generally generated when you make deposits or withdrawals in a currency other than the base currency of the account, and to some extent this is true, but it should also be noted that if you trade on the Forex market in currency pairs whose base currency does not correspond to the base currency of the account, then a conversion will also have to be made at the prevailing exchange rate for the traded pair.
What happens is that this is not seen as a separate commission per se, but is implicit in the transaction.
Let us look at an example:
Let’s assume that the base currency of your account is USD, you open a 0.1 lot position leveraged 1:20 on the EUR/JPY pair, whose price is 125.5.
As a standard lot is 100 000 units of the base currency, you would be buying 10 000 EUR, paying with JPY, and as you have no Yen in your account, you have to convert your USD into JPY which at that moment has a rate of 115.5 (USD/JPY), therefore the exchange rate fee is applied, and the balance of your account is deducted.
The same applies if you make deposits in a currency other than the base currency of your account.
If you deposit in Mexican pesos by bank transfer and the base currency of your account is in USD, then you will be charged an exchange rate fee, as your pesos have to be converted into dollars.
Luckily at Pepperstone you can open an account and choose from a wide variety of currencies, including EUR, USD, GBP, CHF, AUD, CAD, JPY, among others.
Pepperstone’s inactivity fee
We have not found any information regarding account inactivity fees on the Pepperstone website, so we have asked support and they have replied that no, there is no charge for account inactivity.
Fees for deposits and withdrawals
One point that Pepperstone has in its favour is that it does not charge any kind of commission, neither for deposits nor for withdrawals. However, it is important to mention that this broker is not responsible for any fees that may be charged by banks or e-wallets to and from where the deposit or withdrawal operations are executed respectively.
Other commissions of this broker
Pepperstone is quite transparent with its commissions and fees, making it clear that there are no hidden fees or commissions.
For example, any of the following items are commission free:
- Open one or more accounts
- Use your demo account
- Make use of your trading terminals (MT4/5 and cTrader)
- Access Forex signals
Is Pepperstone an expensive or cheap broker?
Throughout this article we have detailed each of the fees and commissions of Pepperstone, you could know what are the swap rates and average spreads, and also other non-operational fees, but with this information, without having other references, it is difficult to determine whether this broker is cheap or expensive, so we have made a comparison table where we compare the fees and commissions of Pepperstone with those of other similar brokers, taking into account several relevant aspects in terms of commissions.
|Average Spread on EUR/USD|
|Average Spread on S&P500||0.75||0.4||0.4|
|Average spread on Gold||0.45|
|Average spread on Bitcoin||0.75% (300)||100||31|
|Average commission on Tesla||0.90||1.08||0.46|
|Withdrawals||$5||30 USD (If less than the minimum)||0|
As you can see, in almost all aspects, Pepperstone is cheaper than the other two brokers analysed, and where it is not less, it draws, so we can consider this broker as a cheap broker.
If you’ve made it this far, you’re probably a little clearer on what you will and won’t have to pay when using Pepperstone’s services, and you also have a general idea of whether it’s an expensive or cheap broker compared to other similar brokers.
To further analyse Pepperstone’ s commissions and fees you can open a demo account with this broker. It is a free tool with which you can test Pepperstone’s trading platforms and conditions risk-free and see how the trading fees impact your simulated trades.
If you found this post helpful, we will be very happy if you share it with your trader friends and on your social networks (and in trading groups,…), that way we will help more people to see our content, and at the same time it motivates us to continue creating pieces like this one.
If you have any questions or suggestions, do not hesitate to leave them below in the comments, we will respond as soon as possible.
Thank you very much for your attention.
This post is also available in Spanish: pepperstone comisiones
Author: Eduardo Montero
Welcome to Mundo-Forex.com: I'm Eduardo Montero, I work professionally in IT. I started trading in the financial markets (mainly Forex) more than 10 years ago. I'm the author of the articles on this website and of many others published on other websites specialised in stock market investment and finance in general. Learn more about me here: About the author.