Investing term
What is FX markup?
The gap between the true (mid-market) exchange rate and the rate your broker gives you.
FX markup is the gap between the true mid-market exchange rate and the worse rate your broker actually gives you when converting currency. The mid-market rate is the fair, real rate you'd see on a financial data site; the rate you're charged is quietly a little worse, and the difference is the broker's hidden profit.
Because it's baked into the exchange rate rather than shown as a separate line item, FX markup is easy to miss entirely — there's no 'fee' to notice. Yet it directly raises the cost of every foreign-currency investment, and you pay it each time you convert, both buying and later selling. A broker can advertise 'commission-free' trades while making its money here, so the markup can be the real cost of international investing.
Your broker converts at 1.093 when the true mid-market rate is 1.100 — the ~0.6% gap is a hidden markup, baked into the rate rather than shown as a fee, and paid each conversion.
For example
The true rate is 1.10, but your broker converts at 1.093 — that roughly 0.6% gap is the FX markup, hidden in the rate rather than shown as a fee.
Learn it by doing
That's FX markup in theory — it clicks when you use it. Practise it hands-on in a free, interactive lesson (Stage 9, Fees, Scams & Protecting Your Money).
Try the free lesson →Why it matters to you
FX markup matters because it's a cost most investors never see, hidden inside the exchange rate rather than itemised. It makes 'commission-free' foreign trades quietly expensive, and it's paid on every conversion, buying and selling. Knowing to compare a broker's conversion rate against the real mid-market rate — and to prefer brokers with a low, transparent markup — is how you avoid overpaying on international investing without realising it.
⚠ Trusting 'commission-free' on foreign trades
A broker charging no commission can still take a hefty FX markup on currency conversion, hidden in a worse-than-real exchange rate. Because there's no visible fee, investors assume the trade is free — while paying the markup on the way in and out. For foreign investing, compare the conversion rate to the mid-market rate, not just the commission.