How does Exness make money trade works (2024)

Exness is a popular online forex and CFD broker that offers a variety of trading instruments and services. The company makes money in a number of ways, including commissions, spreads, leverage, overnight financing, and account fees. Here is an in-depth look at the various ways Exness generates revenue from its trading operations.

Commissions

Exness charges commissions on some of its accounts, such as its standard accounts. Commissions are charged on each trade that a customer places, and they are typically a percentage of the trade volume.

How Exness Commission Works

For example, Exness charges a commission of 0.3 pips on its standard accounts. This means that for every $100,000 trade that a customer places, they will pay a commission of $3.

The commission is calculated as follows:

Trade Volume x Commission Rate = Commission Amount

So on a $100,000 trade with a 0.3 pip commission rate, the commission would be:

$100,000 x 0.00003 (0.3 pips) = $3

The commission rate varies across different account types. It is typically lower on Exness's professional account types compared to standard accounts.

Situations Where Exness Charges Commission

Exness charges commissions on trades for the following account types:

• Standard
• Standard Cent
• ECN
• ECN Zero

It does not charge commissions on trades for the following professional account types:

• Pro
• Pro Cent
• Raw Spread

So traders using Exness's standard account offerings will pay commissions, while professional traders will not.

Strategies to Minimize Exness Commission

There are a couple strategies traders can use to minimize commissions when trading with Exness:

• Open a professional account type like Pro or Raw Spread that has zero commissions
• Make larger per trade sizes to minimize the impact of the fixed commission amount
• Day trade positions rather than holding longer term to reduce frequency of commissions

Spreads

Exness also makes money through spreads. The spread is the difference between the bid and ask price of an asset. Exness takes a portion of the spread as profit on each trade.

What is the Bid/Ask Spread

For example, the bid price for the EUR/USD currency pair may be 1.1250, and the ask price may be 1.1252. The spread in this case would be 2 pips.

The spread represents the difference between the price at which traders can buy (ask) and sell (bid) the asset. It is essentially Exness's markup on each trade.

How Exness Profits from the Spread

Exness quotes a wider spread than the raw interbank spreads to profit off the difference.

For instance, the interbank spread on EUR/USD may be 1 pip. But Exness may quote a spread of 1.5 pips on its standard accounts. The extra 0.5 pip is profit for the broker.

On professional accounts, the spreads are closer to the raw interbank spreads, giving the trader cheaper trading costs.

Minimizing Spread Costs

There are some ways traders can reduce their costs associated with spreads:

• Use a professional account which has tighter spreads
• Trade during liquid trading session when spreads are usually thinner
• Focus trading on major pairs like EUR/USD which have narrower spreads

Leverage

Exness offers leverage to its customers, which allows them to trade larger positions than they would be able to with their own capital. Exness charges interest on leveraged positions, which is another source of revenue for the company.

What is Leverage in Forex Trading

Leverage allows customers to trade larger positions than they would be able to with their own capital. For example, a customer with a $1,000 account could use 100:1 leverage to trade a $100,000 position.

Leverage essentially allows traders to borrow capital from their broker to increase their buying power in the markets. Typical leverage ratios in forex are 30:1, 50:1, or 100:1 depending on the account.

Interest Charges on Leverage

Exness charges interest on leveraged positions. The interest rate charged varies depending on the asset being traded and the account type that the customer is using.

For example, the interest rate on leveraged EUR/USD positions is typically lower on Exness's professional accounts than it is on its standard accounts.

The interest is calculated daily based on the leverage amount and applied to the account. So using higher leverage will result in larger interest fees.

Reducing Leverage Costs

Traders can reduce their costs associated with leverage by:

• Using lower leverage ratios to reduce interest fees
• Opening professional accounts which have lower interest rates
• Closing leveraged positions before daily rollover to avoid being charged interest

Overnight Financing

When a customer holds a position overnight, Exness charges them overnight financing fees. This is because Exness has to borrow money to finance the customer's position.

What are Swap and Rollover Fees

The overnight financing fee is also known as the swap fee or rollover fee. It is charged as a percentage of the position size, and it varies depending on the asset being traded and the interest rate in the country where the customer's account is based.

For example, the overnight financing fee on a long EUR/USD position is typically higher than the overnight financing fee on a short EUR/USD position.

Long positions are charged the financing fee, while short positions may earn a financing credit if they hold overnight.

Strategies to Avoid Overnight Financing

There are two straightforward ways for traders to avoid paying overnight financing fees:

• Close all positions before the daily rollover. This avoids holding trades open overnight.
• Use an Islamic account which does not charge overnight fees due to religious restrictions.

In some cases, traders may opt to hold positions long term and incur the financing fee if they expect it will be offset by profits. But in general, closing positions daily avoids this cost.

Account Fees

Exness also charges a number of account fees, such as inactivity fees and deposit and withdrawal fees.

Inactivity Fees

Inactivity fees are charged to accounts that have been inactive for a certain period of time. The inactivity fee varies depending on the account type.

For example, accounts that are inactive for over 180 days may be charged a $5 per month inactivity fee. This covers Exness's costs for maintaining inactive accounts on their systems.

Deposit and Withdrawal Fees

Deposit and withdrawal fees are charged on deposits and withdrawals made to and from Exness accounts. The deposit and withdrawal fees vary depending on the payment method used.

For example, credit card deposits often involve a processing fee around 2-3%. Bank wire transfers have flat fees around $20-40 in many cases.

Avoiding Account Fees

Traders can avoid account fees by:

• Maintaining regular account activity to avoid inactivity fees
• Funding accounts by low/no cost methods like debit cards to avoid deposit fees
• Withdrawing by low cost payment types like debit cards to avoid withdrawal fees

Conclusion

In summary, Exness generates revenue from its trading operations in a variety of ways:

• Commissions on certain account types
• Taking a markup on the spread
• Charging interest on leveraged positions
• Overnight financing on positions held past daily rollover
• Account fees like inactivity and deposit/withdrawal fees

The costs associated with trading can be managed by selecting the appropriate account type, minimizing leverage, closing positions daily, and using low cost payment methods. By understanding how Exness makes money from trading, customers can make informed decisions and implement strategies to reduce trading costs.