Read a currency pair correctly
EUR/USD is a price for one euro expressed in US dollars. EUR is the base currency and USD is the quote currency. If a quote moves from 1.1000 to 1.1010, one euro is worth 0.0010 more dollars than before. In a long EUR/USD position you are exposed to a rise in the euro relative to the dollar. A short position is exposed to the opposite move. The precise cash result depends on how many base-currency units the contract represents and how the broker settles the position. OANDA's Dutch-facing account FAQ identifies EUR as the base and USD as the quote currency for EUR/USD.
Do not confuse the displayed mid-price with the prices at which you can transact. Providers commonly show a bid for selling and an ask for buying. The ask is above the bid, and the difference is the spread. A quote of 1.10000/1.10010 is a one-pip spread for EUR/USD, where a pip is conventionally 0.0001. For a hypothetical 10,000-euro position, that 0.0001 dollar-per-euro difference is $1 before any commission and before conversion into an account currency. This arithmetic is an illustration, not an available live spread or a claim about any broker's tariff. The Capital.com Netherlands pricing explanation gives a provider-specific worked EUR/USD spread calculation. Use its current instrument page and account terms if evaluating that product.
Identify the product behind the quote
| What the account may hold | Main question | Cost items to inspect |
|---|---|---|
| Currency cash balance or conversion | Is the money actually exchanged and held in another currency? | Conversion rate and markup, account or transfer charges. |
| Spot or rolling-spot forex contract | Is it settled with currency delivery or rolled as a leveraged derivative? | Bid–ask spread, commission, margin and rollover terms. |
| Currency CFD | Is the transaction a contract with a provider rather than currency delivery? | Spread, commission, financing, margin and close-out rules. |
| Exchange-traded currency future | What is the standardised contract, exchange, expiry and clearing arrangement? | Exchange/broker fees, contract size, margin and roll cost. |
The labels do not automatically resolve the legal classification. Some retail platforms call a leveraged rolling currency contract “spot forex” even when no currency is delivered to the customer. The AFM describes rolling spot foreign-exchange contracts often treated as CFDs in one regulatory decision. Read the instrument specification and account agreement to identify the provider's actual product. If it is a CFD, the mechanisms in our CFD guide apply, including margin and the difference between the derivative and owning the underlying.
The distinction also affects what the reader is comparing. A broker with cheap euro-to-dollar cash conversion is not necessarily a competitive provider for leveraged EUR/USD trading. A futures platform may offer exchange-traded currency contracts but a different minimum position size, expiry and daily settlement process. A forex comparison should include only providers and account types that serve the same intended instrument and are available to residents of the Netherlands.
Work out the result before charges
Suppose a contract gives exposure to 10,000 euros of EUR/USD and the reference price rises from 1.1000 to 1.1020. That is a move of 0.0020 dollars per euro, or 20 pips. Before charges, a long exposure has a $20 directional gain: 10,000 × 0.0020. A short exposure has the opposite directional result. If the price instead falls by 20 pips, the signs reverse. The provider's bid and ask, execution price, position unit, account currency and product adjustments determine the actual booked result. This example is intentionally hypothetical and cannot be used to predict an outcome.
For a derivative, the margin posted can be only a portion of the notional exposure. A 20-pip movement is therefore not a 20-pip movement of the cash deposited. Its effect on account equity depends on the contract size and leverage. The AFM's product-intervention page describes leverage limits and margin close-out protections for retail CFDs. Verify the current terms for the exact product and client entity before treating a platform's margin example as applicable in the Netherlands.
Add spread, commission and rollover
Start with the transaction cost embedded in the bid–ask spread. If the quoted spread varies during the day, a single advertised minimum is not a complete description of typical cost. Find the live instrument specification, look at the trading hours and check whether a separate commission applies to the account. A provider can offer a spread-only account and a different account with commission. Prices from the two should not be mixed in one comparison.
If a leveraged position stays open across the provider's daily cut-off, a financing or swap adjustment may be applied. The amount can depend on the currency pair, position direction, notional size, prevailing reference rates and provider markup. It may be charged or credited under the provider's rules. The Capital.com NL cost explanation shows separate spread and overnight examples. OANDA's Dutch document centre directs customers to rollover information. The correct cost for a proposed trade requires the specific contract and current official schedule, not an old generic forex figure.
Also check conversion between the settlement currency and your account's base currency. A dollar-denominated profit or charge converted into euros may be subject to the broker's FX terms. For a trade lasting several days, the full calculation may involve entry spread, exit spread, commission, daily financing and conversion. An order ticket that displays only a small spread at entry cannot show the entire later holding cost unless it also explains the relevant daily schedule.
Trading hours and execution affect the quote
Currency markets trade across global sessions, but a particular retail instrument follows the provider's published opening, closing and maintenance schedule. A position may remain exposed while the underlying market or provider quote is unavailable. Spreads and liquidity can change around session transitions, holidays and news. Execution depends on the contract and platform. Check the exact market hours and order rules before comparing the displayed quotes of two providers taken at different times.
Order types add another distinction. A market instruction seeks execution at the available quote, while a limit instruction sets a price condition but may not execute. A stop instruction may trigger an order under the provider's rules. It does not by itself guarantee an exact closing price. The platform's own order policy determines the available types and how partial fills or rejected orders are handled. In a comparison, a stable-looking chart or one attractive screenshot is not evidence about execution quality.
Check who serves the Dutch account
The relevant company is the legal entity in the client agreement, not merely the international forex brand. Search that exact name in the AFM investment-firm register. The register includes companies authorised in the Netherlands and European-passport firms authorised by a home regulator. A passport entry is not an AFM licence. Check that the service and product offered to a Dutch resident match the entity's disclosures. An international website's “global” account information may differ from the local offer. Our broker-verification guide explains the method in more detail.
For a forex provider comparison, record the entity, pair availability, contract type, position units, platform, spread method, commission, overnight schedule, account currency and withdrawal conditions. These are separate axes. A firm can have a strong charting platform but a complex financing schedule, or a simple app but limited order controls. Our forex-broker comparison ranks suitability by use case rather than declaring one broker universally preferable.
A worksheet for one proposed EUR/USD trade
Before deciding whether a broker's quote suits a particular trade, write down one coherent scenario and fill every line from that broker's official documents and order ticket:
- Product and entity: Is the instrument a deliverable currency conversion, CFD, rolling-spot contract or future? Which legal company is the counterparty or broker for a Dutch resident?
- Size and direction: How many base-currency units or contracts would be held, and what is the corresponding notional exposure? Is the intended position long or short EUR/USD?
- Entry and exit prices: What are the actual bid and ask at the time you intend to deal? What is the spread in pips and money for the chosen size? A quoted minimum and a live quote should be recorded separately.
- Trading charges: Is there a separate commission for opening, closing or both? Does a minimum per ticket change the result for a small position?
- Holding period: Will the trade cross a daily financing cut-off, a weekend or a holiday? Which published rollover rule applies to that direction and contract?
- Currency and margin: In which currency will result and fees be booked, and what conversion applies? What account equity is needed to open and maintain the position?
For a same-day hypothetical trade, some holding-cost rows may be zero under the provider's rules, but that must be checked rather than presumed. For a multi-day trade, ignoring financing can reverse a narrow difference between two providers' entry spreads. Keep the filled worksheet with the source links and the order preview. It makes the comparison reproducible and prevents a cheap-looking quote for a different account or date from being treated as the price of your intended transaction.
Frequently asked questions
Does buying dollars through my bank count as forex trading?
It is a foreign-exchange transaction, but it is not necessarily the same product as opening a leveraged forex CFD or future. With cash conversion you obtain a currency balance. With a derivative you hold a contract whose value depends on the exchange rate. Check what the account actually holds before comparing costs.
What is a pip for EUR/USD?
A pip is conventionally 0.0001 in the EUR/USD quote. Its cash value depends on the position size and the contract's units. A one-pip difference on 10,000 euros of exposure is $1 before charges in the simple hypothetical arithmetic above. It is not a broker quote or a prediction.
Is the spread the complete cost?
Not necessarily. The account can add commission, daily financing or swap adjustments, FX conversion and other product-specific charges. Check the provider's official tariff and instrument specification for the Netherlands-facing account and intended holding period.
Can I use the same forex comparison for currency futures and CFDs?
Only if the comparison explicitly distinguishes the products. A futures contract has exchange, expiry and clearing features that a bilateral CFD does not have. The account and cost conditions must be assessed separately rather than transferring a CFD spread figure to a future or a cash conversion.