I am trying to understand how to size and compare brokers' costs. As per my understanding, they charge customers on either or both spreads and commissions. The latters are straightforward: for each contract a percentage/a fixed amount has to be paid to the broker (two times per round trade, i.e. when entering and when exiting the position): - buying and selling 1 share at 100\$ with 1% commission would result in 2\$ total commissions - buying and selling 1 ES contract (value 50\$) with fixed commission of 3\$ would result in 6$ total commissions
Instead, I cannot get how spread costs work. Can please someone explain the rationale, possibly with numeric examples as above?
P.S.: please also advise whether something above is not correct