One of the biggest financial markets in the world is none other than the forex industry. It has a daily trading volume of $5 billion, which makes it a very attractive option for investment. But, before you start trading, you need to be aware of the trading costs that you will incur. While some brokers you sign up with will charge commission, others make their profits from the spread. This is the difference between the buy and sell price. Traditionally, there are two types of spreads available, which are the floating or variable spread and the fixed spread.
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As the name indicates, fixed spread are fixed before you conduct the trade, which means that traders can know exactly how much they stand to profit or lose. In contrast, floating spreads tend to vary because they depend on the situation in the market and the prices are subject to change due to volatile conditions and news announcements. Floating spreads have gained a lot of popularity because of their potential to offer higher profits. Yes, losses can also be higher, but as long as you are smart, you can make great returns.
Therefore, it is not surprising to discover that a number of brokers in the market offer floating spreads to their traders. If you are looking for a broker who can give you floating spreads, here are the top 3 that you should consider:
eToro
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Launched in 2006, eToro was the brainchild of three partners whose aim was to develop a financial trading platform designed for traders of all levels. These days, it has become the most popular and largest social trading broker that serves more than 6 million clients spread out over 150 countries. Each day, thousands of new traders sign up on eToro to take advantage of its platform. The greatest security that the broker has to offer is the fact that it is heavily regulated. The services that the broker provides through its Cyprus headquarters and its entities in Europe, Australia and UK are authorized in three separate jurisdictions.
It complies with the regulations set forth by MiFID that serves European customers, the UK Financial Conduct Authority (FCA), ASIC for Australian clients and the Cyprus Securities and Exchange Commission (CySEC). The broker also offers its own trading platform to traders, which comes with a number of unique features and tools that are not available with other trading platforms. Traders can take advantage of both desktop and mobile versions of their trading platform, as per their convenience.
The minimum deposit requirement of the broker begin at $100, which is extremely low and enables anyone to sign up with the broker easily. The maximum leverage that it has to offer is 1:30, according to the regulations it has to comply with. Floating spreads are available, which start at 3 pips for the EUR/USD currency pair. Another benefit of eToro is that the broker also offers its traders access to other instruments for investment purposes, other than the forex market.
The platform is easy to use, which allows even newbies to get started immediately. There is a wide array of payment methods supported by the broker including credit and debit card, bank wire transfer and more, which makes it easy to fund your account. Both beginner and experienced traders will be able to use the broker’s services without any hassle.
ETX Capital
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If you are looking for a really old broker that can offer you floating spreads, one of the best choice is none other than ETX Capital as the history of this company can be traced back to 1965. It provides its users with access to online trading innovative technology as well as 6,000 markets. Plus, its services are supported by great opportunities and a strong customer support team. It offers more than 50 forex currency pairs and it has some very powerful features that can be incredibly handy during trading. With ETX Capital, you can enjoy truly competitive pricing because it provides you with floating yet tight spreads.
The broker has also ensured that new traders can educate themselves properly before they start trading. Therefore, it has introduced a demo account that can be used for practice purposes and also has a complete section dedicated to trading education. They also have friendly and highly responsive customer support services that are available through email or phone and can be used for getting answers to any questions you may have.
With this broker, you don’t have to worry about being scammed because ETX Capital is actually the trading name of Monecor Limited, the company that has its headquarters in London. It is regulated by the Financial Conduct Authority (FCA) and is also a member of the London Stock Exchange. It complies with all the standards and regulations set forth by the FCA, which are quite strict, and ensure the reliability of the broker. Under these rules, your funds are kept separate from the broker’s accounts, which means that your investment will be safe even if the broker goes bankrupt.
They also offer their customers a proprietary trading platform called TraderPro, which boasts some of the most powerful and fully customizable software with advanced charting and intuitive design. You can find the highest grade professional tools on this platform and take advantage of the flexible graph options. If you don’t want to use this platform, ETX Capital also offers the industry leading MetaTrader4, which is renowned for its selection of automating capabilities, charting capabilities and user-friendliness. A mobile option is also made available for both Android and iOS to make it convenient for the users.
As far as the spread tariffs are concerned, the trading fee charged by ETX Capital is built into the spread. They offer competitive spreads in the market, such as 0.6 for the EUR/USD pair, but since they are floating spreads, these can vary. Some of the factors that can have an impact on these spreads include available liquidity, volatility and other market conditions. The leverage that you get from the broker is 30:1 and the minimum deposit requirement to get started is 100 GBP.
CMC Markets
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Established in the UK in 1989, CMC Markets is an English broker that has become one of the biggest names in the forex market. They have broadened their presence over the years and have offices in Australia, Canada, Austria, Ireland, France, Germany, Italy, Norway, Singapore, New Zealand, Sweden, Spain and Poland. The broker pays attention to both beginners and experienced investors and traders and the best part is that it is heavily regulated and authorized for providing their services.
Their UK headquarters are regulated by the Financial Conduct Authority (FCA), Australian regulation is done by ASIC, IIROC for Canada, Financial Markets Authority in New Zealand and the Monetary Authority of Singapore (MAS). The trading platform available on CMC Markets has a both web and mobile version and they are powerful and innovative. They are equipped with some advanced and accurate tools that can be immensely helpful in trading. Furthermore, they also come with risk-management features, which can be very appealing to traders who are venturing in the market for the first time.
Signing up on CMC Markets enables you to get access to more than 300 global currencies in the forex market, along with plenty of other instruments. There are trading and corporate accounts available and you can select one as per your convenience. A demo account is also offered to beginners and there is strong customer support available to assist at any and every stage. There are no minimum deposit requirements that have to be met when you make an account on CMC Markets.
Amongst the numerous advantages that CMC Markets has to offer, one of the most notable ones is its competitive and floating spreads. The spreads on major currency pairs in the forex market begin at 0.7 pips, but this spread may change under volatile conditions as it is not fixed. The leverage that the broker has to offer is 1:30. As far as payment methods are concerned, CMC Markets has chosen to be a bit more modest as compared to the other brokers out there.
For your deposits and withdrawals, you can either go with bank wire transfers or you can take the option of debit and credit cards, which include both Visa and MasterCard. While there is not a minimum deposit requirement, it is recommended that at least 200 GBP be deposited for covering your initial costs.
In the last few years, the broker has won numerous awards because of the quality and variety of services it provides to both newbies and experienced traders. The broker ensures that everyone has a good opportunity to take advantage of the offerings in the forex market and at excellent rates and minimum cost. Since it is heavily regulated, you can use their platform safely, regardless of whether you use the desktop or mobile option.
You can opt for any one of the three mentioned brokers when you are interested in floating spreads.
