Direct answer
When you hear “Verify Licence,” treat it as an information-checking process: confirm that a provider’s licence status and disclosures are real, and then focus on the costs you can independently observe. For the costs part, the fees and spreads to check are the ones that are (1) published as part of the trading terms and (2) can still vary at execution time due to market conditions.
A practical way to explain it is: spreads and fees you can verify on documents or platform pages are one category, while execution outcomes that change when you place orders are another. This separation helps you avoid mixing “advertised cost” with “what happened in that specific trade.”
Mechanism and definitions
Spread is the difference between the quoted buy price and sell price for a financial instrument at the time you can trade. The key detail for verification is that spreads can be fixed or variable depending on the provider’s setup and market liquidity.
Fees can be direct charges (for example, a commission per trade) or indirect charges (for example, recurring financing costs for holding a position). In forex, financing/rollover costs often depend on factors like position size, duration, and the instruments’ overnight rates.
Published pricing vs execution outcomes matters because execution outcomes can be affected by:
- whether the spread at the moment of execution matches the spread you expected from a quote
- execution quality issues such as slippage (you get a worse price than expected)
- order type and liquidity conditions
So “which fees and spreads to check” is mainly about identifying every cost component the provider states, then testing how those components behave during an actual order placement.
Evidence or example (with assumptions)
Assume you are comparing two providers for the same type of forex instrument, but you only have general, non-real-time information. Your example should therefore be conceptual and assumption-driven.
- Commission and per-trade charges
- Assumption: the provider charges a commission per standard lot (or per unit) and may also have other account fees.
- Check: confirm the commission schedule and whether it is per side (buy and sell) or aggregated.
- Why this is part of verification: commission is often stated clearly in pricing documents, so it is easier to compare than execution-dependent items.
- Spread type and typical vs variable behavior
- Assumption: the provider advertises “typical” spread ranges, but your actual executed spread can differ.
- Check: whether spreads are described as fixed or variable, and under what conditions wider spreads may occur.
- Why this is part of verification: the term “typical” is not the same as a guarantee for your trade.
- Financing/rollover and holding-cost rules
- Assumption: if you hold a position overnight, additional costs apply.
- Check: identify how these costs are defined, when they are applied, and how the provider calculates them.
- Why this is part of verification: holding costs can materially change the total cost beyond the entry/exit spread.
Controlled test idea: pick a small position size in a live or demo environment (whichever you are allowed to test) and record the quote-to-execution difference. The goal is not prediction; it is to see whether the provider’s actual execution reflects the published pricing definitions. Use the same assumptions each time (same instrument type, similar time window, comparable order size and order type).
Limitations and risks
- Spreads change over time: even if a provider publishes spread ranges, market liquidity can shift quickly, making your executed spread different.
- Slippage can occur: execution may happen at a less favorable price than the quote you saw a moment earlier.
- Hidden or indirect costs: financing/rollover, inactivity or account charges (if any), and conversion-related costs can change the effective total cost.
- Documentation vs reality: disclosures may describe one model, while actual execution can vary under stress conditions (for example, low liquidity periods).
A material failure mode is double counting or misattributing costs, such as treating a “typical spread” as if it were your actual executed spread, or adding fees that apply only under certain account or holding conditions.