We’re transparent with our pricing
Where we source our prices
In forex, the underlying asset is an OTC (over the counter) instrument, so to enable seamless trading we maintain relationships with several Tier 1 Banks as well as multiple Electronic Communication Networks (ECNs). They provide us with liquidity from around the globe (including London and New York), and in some cases the total number of providers can reach up to 12 liquidity sources.
Furthermore, we periodically review our liquidity sources to ensure that we continue to offer you the best prices.
How we deliver our prices
Whether it’s for our professional, retail or institutional clients, we have a variety of channels to deliver prices. They include:
- Mobile app (iPhone and Android)
- Our web trading platform
- MT4 for technical users
- FIX API for institutions
Our delivery mechanisms push prices out rapidly and automatically adapt to the connection speed of each client. This enables us to provide the highest possible frequency of updates without jamming the communication line. For our mobile and web offering, we use LightStreamer technology.
How liquidity affects our prices
Our state-of-the-art systems stream continuously tradable prices within the published trading hours for each market. However, some currency pairs are inherently more illiquid than others and even liquid ones sometimes undergo periods of illiquidity.
We aim to price whenever the underlying market is tradable, but there may be exceptional circumstances when prices are wide or, in extremes, unavailable.
Our product passes on market conditions to you where the spread widens and tightens with available liquidity in the market.
How our prices compare to our competitors
We are a global company, using liquidity from all over the world to serve our clients. We access liquidity from the best possible institutional feeds. This makes our prices unique and spreads exceptionally tight. We select quotes on a best price basis, with no skewing based on our view or positions held.
The competitive landscape varies from region to region and we stay aware of our competitors regularly to ensure you are getting the best value.
What happens to your funds?
How does FOREX.com make money?
On Spread-Only Accounts, FOREX.com is compensated via spreads, which are the difference between the bid and ask prices. On RAW Pricing Accounts, FOREX.com is compensated via spreads and a $7 USD commission per $100k USD traded. We work hard to provide transparent pricing and tight spreads. You may incur a rollover charge if you hold your positions overnight.
Hedging client positions
As we make most of our revenue from the spread, we do not directly profit when a client wins or loses.
A lot of our client positions offset with each other. For example, at any one point we tend to see broadly similar numbers buying in EUR/USD as we have selling. This is called internalization.
We have internal risk limits to make sure the risk we hold is safe and does not put the company at risk. We hedge to ensure the positions we hold are kept to safe levels. If a majority of clients buy GBP/USD, we will send orders to our liquidity providers to buy, trading in the same direction as our clients to net off their risk.