Spreads on IC Markets vs XM broker may vary depending on the specific account type and market conditions.
Both IC Markets and XM are some of the most well-known forex brokers in the industry. They welcome traders of various trading styles and backgrounds with speedy execution. However, which has the better spread between IC Markets vs XM?
Spreads offered by forex brokers may vary depending on the specific account type and market conditions. As we could not monitor global spreads fluctuation in real-time, we can only compare the available rules for spreads on IC Markets vs XM broker. Let's study it thoroughly.
What are the spreads on IC Markets?
IC Markets has long been providing some of the tightest spreads among all forex brokers worldwide through their Raw Spread Account. On the MetaTrader and cTrader platforms, raw spreads begin at 0.0 pips. Their average EUR/USD spread, as low as 0.1 pips, is now one of the tightest in the world.
How did they do that? IC Markets is able to constantly find the best deal for its clients and maintain narrow spreads by combining quotes from up to 25 different liquidity providers. It greatly benefits traders, particularly during periods of extreme volatility like those following high-impact events.
🌐 WebsiteIC Markets is an online forex broker operating under the company of International Capital Markets Pty Ltd. Traders under the Australian jurisdiction are provided with the trading service of IC Markets AU that is headquartered in Australia and licensed by the Australian Securities and Investments Commission (ASIC).
On the other hand, non-Australian traders who open an account in this broker are registered under IC Markets SEY that is based in Seychelles, and regulated under the Seychelles Financial Services Authority (SFSA). The dual operation is a result of the relatively new rules from ASIC that prohibit their regulated broker to offer trading services outside Australia.
Classified as an ECN broker, IC Markets provide clients with MetaTrader 4, MetaTrader 5, cTrader as platform trading options. This broker also follows market trends to include Cryptocurrencies as one of its products, enriching its already wide selection of trading assets that include Currencies, Indices, Metals, Energies, Softs, Stocks, as well as Bonds.
The minimum deposit in IC Markets is in the middle range compared to other ASIC-regulated brokers, as it reaches $200 for every client. Market analysis materials are also prepared regularly for trading insights on IC Markets's official website, proving their competence to serve their traders with important contents created by market experts that work specifically for them.
For payment methods, IC Markets allows funding and withdrawal via wire transfer, credit card, PayPal, Skrill, Neteller, FasaPay, UnionPay, as well as Bitcoin via BitPay. The more interesting aspect from this broker is its multi-base currencies that include USD, AUD, EUR, GBP, SGD, NZD, JPY, CHF, HKD, and CAD.
As the trading technology in IC Markets is highly equipped with co-located servers and extremely low latency (especially on cTrader), the broker is widely known for its capability in hosting traders with the special needs for high-frequency trading as well as scalping.
To sum up, IC Markets is a fitting destination for active traders looking for a well-regulated broker. IC Markets is also flexible in terms of base currency and payment methods, signaling their commitment to welcome traders beyond their home country. As of late 2019, IC Markets provided their website in 18 international languages including English, Korean, Indonesian, French, Spanish, Italian, Malay, German, and Chinese.
IC Markets' Depth of Market (DOM) also shows the whole range of executable prices directly from level II liquidity providers. It enables complete transparency of each currency pair by displaying the volumes that are currently available for each price level. Meanwhile, low latency and high liquidity ensure the narrowest spreads feasible 24/5.
All of that doesn't come cheap, however. IC Markets charges a commission fee of $3.0 per USD100,000 in cTrader and $3.5 per USD100,000 in Metatrader. It is not the most expensive in the industry, but it is also not the most affordable.
You can choose their Standard Account instead if you don't want to deal with it. IC Markets' Standard Account charges zero commission per lot per side, but spreads are comparably higher, starting at 0.6 pips.
What are the spreads on XM?
XM broker offers three types of trading accounts for forex traders: Micro, Standard, and Ultra Low. Spreads on XM can be as low as 0.6 pips in their Ultra Low account, or as low as 1 pip in Micro and Standard accounts.
All of them are free of commission fees. As such, you may open an account in XM to enjoy cheaper trading costs.
Notwithstanding its affordability, it needs to be noted that XM is not an ECN broker and does not provide DOM. It means that XM's environment may be preferable for beginners who will benefit from simpler trading platforms than for more experienced traders who seek better transparency.
Keep in mind that XM's status as a market maker does not make it uncompetitive. Due to its low minimum deposit requirement and competitive pricing, XM remains a favorite for more than 3.5 million clients in over 200 countries.
Established in 2009, XM is a member of an online brokerage company called Trading Point of Financial Instruments Ltd. In providing clients on a global scale, the company has branched into XM Australia and XM Global, and XM Cyprus. Each member has different headquarters and licenses, with XM Australia registered under the Australian Securities and Investment Commission (reference number: 443670), XM Global under the IFSC (60/354/TS/19), and XM Cyprus under the Cyprus Securities and Exchange Commission (reference number: 120/10).
XM is one of the more experienced brokers in the world of online forex trading today. Since its founding, the broker has experienced a lot of changes, including the addition of the Ultra-Low Account and Webinar feature that is accommodated in 19 different languages with 35 native instructors for each language.
In terms of trading instruments, XM is a well-known diverse class assets provider, varying from Forex, Commodities, Equity Indices in CFDs, Precious Metals, Energies, to Shares. XM prides itself to be the ideal broker in trading execution, offering a stat of 99.35% orders to be executed in less than 1 second. Trading in XM would be also provided with a strict no requotes policy, no virtual dealer plug-in, no rejection of orders, real-time market execution, and the choice for traders to place orders online or by phone.
Spreads on all majors can reach as low as 0.6 pips in Ultra-Low Account, while spreads on other accounts usually start from 1 pip. Instead of providing maximum leverage on the scale of 1:500 or 1:1000 (round numbers), XM chooses to limit their leverage on a 1:888 scale, a unique number that is now widely recognized as XM's trademark.
To protect the client's fund in the event of extreme volatility, XM presents each account type with Negative Balance Protection. The deposit starts from $5 in Micro and Standard Account, while Ultra-Low Account requires a minimum deposit of $50. Traders who open accounts in XM are enabled a condition similar to a Cent Account environment in the Micro Account, in which the Contract Size for every lot is only 1,000 units. If it is applied with the smallest lot size in the MetaTrader platform which amounts to 0.01, it means that traders can go as small as 10 units per trade.
For the deposit, XM applies zero-fee deposits in most of its available payment methods. Traders can choose to fund or withdraw their accounts via wire transfer, credit card, as well as the most favorable e-payment choices like Skrill, Neteller, and FasaPay.
XM also provides an Islamic Account for Muslim Traders obligated to Sharia Law that prohibits the use of interest generated by overnight swaps for each currency pairs. To give their clients the best experiment in trading, XM has given access to both MT4 and MT5 platforms, each is available for more than 6 display formats (PC, Mac, Multiterminal, WebTrader, iPad, iPhone, Android, and Android Tablet).
All in all, there is no doubt that XM has gone global with its deep commitment to providing trading services in more than 15 languages around the world. Aside from easing traders' experience with mainstream trading platforms and high-quality trading execution, XM is open to various types of traders, from small capital traders to the more experienced ones with big deposits at the ready. Traders are even provided with a Cent Trading environment should they choose to register under Micro Account.
For their global approach, XM has ensured that traders from various countries could access their service easily. This results in the provision of different domains specified for traders in certain jurisdictions. For example, traders from Indonesia could access XM via this link.
Conclusion
IC Markets and XM equally apply floating spreads on all account types. However, they implement different pricing structures.
IC Markets has the lowest spread, while XM offers cheaper fees overall. Due to this contrast, traders are recommended to choose the one that is most suitable for their trading styles and available capital.
Look over their respective demo accounts to understand how their spreads work in real market environment. It's also crucial to take into account additional aspects before making a choice, including the trading platforms, customer support, and the overall reputation of the broker.
5 Comments
Jimmy carter
Jan 28 2023
Sally
Jan 28 2023
Jimmy Carter : Do not be disappointed, in fact not all brokers in the world are connected to the forex market. It is simply a bridge for a client or trader to connect with a liquidation provider that has access to live markets.
There are several types of brokers namely Non-Dealing Desk, Dealing Desk and ECN. You can read the details here: Brokers Type that you must know
For now, let's focus on the No Deal Table (NDD) first. If you have read the article I shared above, you will see that NDD works like this:
As you can see, the brokers actually send your order to the secondary liquidity provider, which is the bank or other financial provider, then the secondary LP sends the broker's order through the primary liquidity provider, then the order will be sent to the market forex exchange. And with this situation, as a trader, we cannot know the depth on maarket condition and due to many processes going on, spreads can increase, and the broker can mark up the spread too. So don't be confused if some brokers can apply spreads from 0 pips to 1-2 pips or even more.
Gabriel
Jan 28 2023
Don't forget about ECN brokers as they can also be the main liquidity providers but most of them include IC Market which will send your order through other major banks or central banks with good rates for them. Roughly like this:
YOU >>> ECN BROKER >>> MAJOR LIQUIDER >>> CHILD MARKET
So basically, not all brokers are directly connected to the market. I can say that they only send your trade into the market. But in return, they will charge you the difference or commission.
Can you trade Forex without a broker? Yes, you can if your money is the same as that of central banks and you have direct access to the forex market. Sounds impossible, doesn't it? So as a trader we desperately need a broker.
Morgan
Jan 28 2023
What is DOM? I mean both the IC Market explanation and the XM Market explanation have this term. Is it very important? Why do some brokers like XM not offer it? The article says can DOM be transparent. I think all brokers need to be transparent because as we know the job of brokers is to send our money to the market. So, if the broker wants us to trust him, he must at least show transparency of the market. Or do I have a wrong definition of transparency that involved DOM? Can someone explain it to me? Thank you!
Junior
Jan 28 2023
Morgan: Depth of Market is a feature available when using a RAW account, also known as an ECN account. With this feature, you can view the entire market in depth including other traders' positions, actual spreads and all real market conditions. (Read here for the details : Depth of Market)
And because of this feature your spread can be 0.0 or even no spread, the brokers can't give you spreads because you really know the real market spread. Scalping, professional traders and even EA users can use this to great advantage. Therefore, DOM can provide you with transparency.
But Depth of Market also has its downsides. Since it is not possible to charge a spread, brokers charge a higher commission than other accounts. And the usual side-loading facility. For example like this: If you open a position, you will be charged $3, then you close the position, you will be charged $3 again. So the total commission charged for a trade is $6. Therefore, it will not be suitable for a new trader to trade with an ECN account.