A broker does not give away a VPS. It pays for one out of the commission and spread you generate, and it only does that for clients who generate enough. So the useful question is not whether the VPS is free. It is what else that same trading volume could have bought you.
For most active traders the answer is a better commission rate, and a better rate is worth more than a server.
We sell VPS hosting, so we have an interest here. The arithmetic below does not depend on whose VPS you use, and for some traders it says to take the broker’s offer.
How the Free VPS Is Funded
Every lot you trade earns the broker money, through commission on a raw account or through the markup on a standard one. A free VPS offer sets a volume or balance condition so that the broker’s income from you comfortably covers the hosting bill.
That makes the VPS a rebate. The broker is handing a slice of your own commission back to you, in the form of a server, at a value the broker chose.
There are other ways to get a slice of your commission back:
- A lower commission per lot
- A cash rebate per lot traded
- Tighter spreads on the pairs you trade most
Brokers offer these to clients who trade size, often through a published active trader tier and often just by asking an account manager. They rarely offer them on top of every other perk. When you accept the free VPS without asking, the VPS tends to be the whole of your discount.
The Rebate Is Fixed and Your Volume Is Not
A VPS is worth roughly what it would cost you to rent one. Ours start at $29 a month, so use that as the value of the freebie.
That value does not grow when you trade more. A rate reduction does. In our experience an active trader can normally negotiate $1 to $2 off the commission per round-turn lot. The table shows what the free VPS is worth per lot, next to the low end of that range, a $1 cut.
| Lots per month | Free VPS, value per lot | $1 rate cut, value per month |
|---|---|---|
| 10 | $2.90 | $10 |
| 30 | $0.97 | $30 |
| 60 | $0.48 | $60 |
| 100 | $0.29 | $100 |
| 200 | $0.15 | $200 |
| 500 | $0.06 | $500 |
At 10 lots a month the free VPS is the better deal by a wide margin. A broker is unlikely to cut your rate at that volume, and $2.90 a lot is a generous rebate.
At about 30 lots a month the two are level. Past that, the rate cut wins and keeps pulling away. At 200 lots a month, a trader who took the free VPS and never asked about the rate is giving up about $200 a month to save $29. With a $2 cut the crossover drops to about 15 lots and the same trader is giving up $400.
To run this with your own trades, commission and broker terms, use the free VPS cost calculator.
If You Trade a Lot, Negotiate
The break-even depends on what your broker will actually offer, so the only way to find yours is to ask. Before you accept a free VPS:
- Work out your real monthly volume. Use the last three to six months of statements, not your plans.
- Ask the broker what it offers at that volume. Use the words “commission reduction” and “rebate per lot”. Ask whether there is an active trader programme and what the tiers are.
- Put a number on each option. Multiply the per-lot saving by your monthly lots and compare it with the price of a VPS you would otherwise rent.
- Ask for both. Some brokers will give a rate and a VPS to a client they want to keep. You lose nothing by asking.
- Get a second quote. A competing broker’s rate for the same volume is the strongest thing you can bring to the conversation.
If the broker will not move on the rate at your volume, take the free VPS. It is a real saving and you have confirmed nothing better was on the table.
What Else You Give Up
The commission is the largest cost and the easiest to miss. The others are covered in detail in Free Broker VPS vs Paid Forex VPS:
- The monthly volume condition can push you into trades your strategy did not call for.
- The server is tied to one broker, which rules out a second broker, a prop firm account or a copier.
- You may not be able to install your own software or control when the machine restarts.
One more point follows from the negotiation. A VPS you pay for yourself is not part of the broker relationship, so it does not weaken your hand. If your hosting disappears the moment you move your volume elsewhere, you are less likely to move it, and the broker knows that.
Where the Server Should Be
Whichever you choose, the server only helps if it is close to your broker’s trading servers. That varies by broker, and a London VPS can be 70ms from a broker whose servers are in New York. We publish measured latency to over 400 brokers from each of our datacenters, so you can check before you pick a location.
Frequently Asked Questions
Is a broker’s free VPS really free?
You do not pay a monthly fee, but the broker funds it from the commission and spread on your trades, and only while you meet a volume or balance condition. It is a rebate paid in hosting.
How much do I need to trade before negotiating is worth it?
There is no single figure because it depends on the discount your broker will give. In the example above, a $1 reduction per round-turn lot overtakes a $29 VPS at about 30 lots a month, and a $2 reduction does it at about 15. Ask your broker for its actual tiers and run the same sum.
Can I get a lower commission and a free VPS?
Sometimes. Brokers decide this client by client, and high-volume clients have the most room to ask. The only reliable way to find out is to ask for both.
Should small-volume traders take the free VPS?
Usually yes, provided your normal trading already meets the condition. At low volume the free VPS is worth more per lot than any rate reduction you are likely to be offered.