MT5 is ideal for share CFD trading, while cTrader is great for algorithmic trading with advanced trading tools. Since trading OTC products such as CFDs carries a high level of risk of losing money due to an array of factors, retail clients require proper risk management tools to safeguard their active positions. One such tool is the guaranteed Stop Loss, which sets an absolute limit on potential losses and also reduces the risk of slippage.
The open market consists of companies that don’t have any reporting requirements and aren’t subject to regulatory oversight. The main difference between OTC and public markets is the level of liquidity. OTC securities tend to have very low volume, resulting in potential slippage after large transactions. In addition, OTC markets also Over-the-counter Finance have much lower disclosure requirements than public markets, meaning that it can be harder to find accurate information about the securities being traded. While OTC markets do not have the same safeguards as public exchanges, those trades are still supervised by FINRA and other regulatory bodies to prevent market manipulation.
Throughout the years, its path has been marked by significant fluctuations in value, reaching an all-time high price of $73,084 on March 13, 2024. Weigh your risks, plan your moves and leap into trading with your preferred broker. Let’s say you wanted to open a position for a EUR/INR forex futures contract on the NSE through your broker. With a January 2024 contract priced at 90.35 INR per euro, you’d need 2,845 INR (roughly 32 euros, as of January 2024) for the margin requirement to open one lot.
Forex, or foreign exchange trading, is a decentralized market where participants trade currencies. It is the largest financial market in the world, with trillions of dollars traded daily. Traditionally, forex trading was conducted through physical exchanges, such as stock markets. However, with the advancements in technology, most forex trading now takes place over-the-counter (OTC) through electronic trading platforms. In this comprehensive guide, we will explore OTC forex trading platforms, their features, and how they work. Eightcap offers its Forex traders deep liquidity pools, essential for decentralized over-the-counter or OTC trading.
However, due to restrictions on locally regulated financial institutions in India, the only way for local citizens to speculate in the forex market is to use a foreign broker — such as those on our list — that accepts clients who reside in India. Sam Levine, CFA, CMT, the lead writer for StockBrokers.com, has over 30 years of investing experience and actively trades stocks, ETFs, options, futures, and options on futures. He’s held roles as a portfolio manager, financial consultant, investment strategist and journalist. He holds the Chartered Financial Analyst (CFA) and the Chartered Market Technician (CMT) designations and served on the board of directors of the CMT Association. We evaluated both the minimum spreads on key currency pairs, notably the EUR/USD, GBP/USD and EUR/GBP, but also average spreads. We did this by recording spreads during the most actively traded sessions – the US/London overlap and the Sydney/Tokyo overlap.
One of the best analytical features is the Quad Screen Display feature, which allows traders to analyse four real-time charts simultaneously on any mobile device. All these features are also accessible on ThinkTrader’s mobile app, making it perfect for traders always on the move. The broker will charge a small commission for trading Forex and Spot Metals on its Raw account depending on the base account currency chosen. Forex trading on a USD-denominated Raw account will incur a charge of $3.00 per side ($6.00 per round turn) per 1 Standard Lot. IC Markets trading servers are collocated in the world’s largest financial hubs New York and London. The MetaTrader 4 and MetaTrader 5 servers are located in the Equinix NY4 data centre.
For example, Pepperstone has no minimum deposit requirement, while eToro has a minimum deposit of $500. The forex fees and commissions charged by OTC brokers depend on the broker you trade with. You will only pay fees with brokers offering ECN/RAW-style accounts, and some brokers may charge additional fees such as deposit/withdrawal fees and inactivity fees. When choosing an OTC forex broker, understanding a trading platform’s capabilities and what trading tools you like to use is an important consideration. We like their Smart Portfolios which use AI to create indices of the best-performing eToro traders or shares based on themes or sectors. From our experience, eToro’s web and mobile trading platform is a solid choice if you want to copy trade from the broker’s large community of 30 million registered users.
Most brokers that sell exchange-listed securities also sell OTC securities electronically on a online platform or via a telephone. In addition to being regulated by the CFTC and a member of the NFA, IG is publicly traded, well-capitalized, and holds more regulatory licenses around the world than any of the 60+ forex brokers we review on ForexBrokers.com. At ForexBrokers.com, our evaluations of online brokers and their products and services are based on our collected quantitative data as well as the qualitative observations and qualified opinions of our expert researchers. Each year we publish tens of thousands of words of research on the online forex brokerage industry, and we evaluate dozens of international regulator agencies (click here to learn about how we calculate Trust Score).
Second, the IBKR Pro plan allows professional clients to receive the best price execution due to IB’s SmartRouting technology. The latter ensures a $0.47 per 100 shares price improvement compared to the industry overall. Founded in 2008, Plus500 is a trusted CFD and Forex provider, listed on the London Stock Exchange (LSE). The main regulators that supervise Plus500’s trading operations are the UK’s FCA, Australia’s ASIC and Cyprus’ CySEC – all tier-one regulatory agencies. EToro’s CopyTrader technology allows users to copy up to 100 traders simultaneously, with clients also being able to pause or stop the copy, to add or remove funds at any time. With IG, clients can access more than 17,000 financial instruments grouped in multiple asset classes as follows.
In the U.S., the OTC Bulletin Board (OTCBB) is a popular electronic inter-dealer quotation system through which over-the-counter securities are traded. Forex trading also takes place in over-the-counter markets as transactions are executed outside of a centralized exchange. Instead, most OTC trades will be between two parties, and are often handled via a dealer network.
- The latter ensures a $0.47 per 100 shares price improvement compared to the industry overall.
- Most brokerages allow retail investors to trade on OTC markets, although they may have additional requirements due to the risk of OTC trades.
- Forex, or foreign exchange trading, is a decentralized market where participants trade currencies.
- Uniquely on Upstream, investors are directly connected to the exchange with their Upstream trading app, eliminating the need for stockbroker middlemen.
They provide traders with access to real-time market data, charts, technical analysis tools, and execution capabilities. OTC forex trading platforms are available as desktop applications, web-based platforms, and mobile apps, allowing traders to access the market from anywhere at any time. IG accepts residents of India as clients and outranks the competition in many of our most important review categories.
We also take an in-depth look at each broker’s commissions and fees, such as bid/ask spreads – including the average spread data for some of the most popular forex currency pairs. We research other trading costs, such as inactivity or custody fees, minimum deposit requirements, VIP rebates and/or discounts, and an exhaustive list of other important fee-based data points. The best forex brokers for forex options trading in 2024 provide multiple trading tools and options products to help distinguish their offerings from the competition, in addition to being highly regulated and trustworthy.
What trading platform you prefer and what an OTC broker offers are vital to trading success. If you’re an MT4 trader, there are plenty of great brokers such as Pepperstone, IC Markets and IG Group. The main difference between an OTC forex broker and on-exchange trading is you’ll usually only see a single buy and a single sell price with OTC trading. This differs from on-exchange trading, where you will see multiple buy and sell prices from various parties. The best OTC (over-the-counter) forex broker depends on your definition of what you value the most in a broker. To quickly define, OTC brokers allow you to trade securities via a broker-dealer network (I.E., a decentralised environment) without official price quotations or clearinghouses.
Joey Shadeck is the Content Strategist and Research Analyst for ForexBrokers.com. He holds dual degrees in Finance and Marketing from Oakland University, and has been an active trader and investor for close to ten years. An industry veteran, Joey obtains and verifies data, conducts research, and analyzes and validates our content.