Non Derivative Forex Trading


Contract for Difference (CFD) is a derivative product, which means we do not own any assets directly; instead, the value of the CFD product is derived from underlying assets. Therefore, CFD trades are not real currency exchanges.

Is there any forex trading that is not a derivative, allowing us to own real assets (currencies)? If so, which forex broker offers non-derivative forex trading?

Another question: Is spot forex derivative or non-derivative?

Yes, of course: CFD-trading is illegal in America, but there are plenty of Americans trading forex, and there are spot forex brokers in the US (e.g. Oanda and regulated by the CFTC, aren’t there?

It can be either because the term is very loosely used, especially at BabyPips.

The two are often subject to different laws which can vary from country to country, You highlighted this yourself, only yesterday, in a post you made offering legal advice to someone about forex-trading in India.

The minimum amounts tradable, and minimum deposits required, can be far higher for non-derivative spot than for CFD.

Very, very few (if any) “normal retail traders” with enough funds to trade non-derivative spot with some brokers would be trading spot anyway: as has been mentioned here very often, nobody who can do this profitably, long term, would choose voluntarily to stay with CFD forex anyway, when they could so easily switch to forex futures and have far better and safer regulation, a genuine broker who wants them to win, far better protection of funds, high leverage, no spreads to pay, and the ability to trade in a transparent, honest market in which all brokers have the same prices at the same times rather than just betting against a counterparty on the price-movements of the counterparty’s own “products”.


I was unaware of it.

What we call Non Derivative Forex Trading?. For Derivative Forex Trading we have a name like CFD or Spread-beating. Is there any name for Non Derivative Forex trading?

Forex Futures or Forex Options are also a Derivative right?

Can you game genuine broker which your referring here for Forex Future and Non Derivative? (Or it same Oanda and which you mentioned above?)

Is it just me or do other people also find trying to distinguish between types of forex market access just a big distraction of no value?


I take your point but I think in some countries it may matter a lot, for legal reasons(?).

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Of course it matters. CFD brokers are less trustworthy. I am using ICMarkets and traded AUD CPI news today. News went in my favor but i am still loss because suddenly spread went to 200+ Points (20+ Pips).

Non-Derivative Trading does not have these kind of scam and manipulation.

When you trade the news it’s really easy to get the direction right and still lose money, but the answer to that is to learn to stop trading the news, not to learn to use a different sort of broker.


I’m not sure that trading CFD’s is the reason why 70-80% of active traders are losing money. But I am pretty sure that the winning and losing percentages would not be reversed if traders went into non-derivative trading.

Most new traders have absolutely no idea what would be the first step in trading - which is of course, learning to trade.

If you like CFD trading but are bothered by high spreads, you might consider using fixed spread brokers.

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A fixed-spread broker obviously won’t tolerate news trading for long, if the customer shows them he can take their money that way (but very, very few people really can, and they’re futures traders anyway).

This, exactly!

I totally agree with you. But trader like me who cannot open account with FCA, ASIC or CFTC due to my country restriction and i have to choose other small island regulatory than brokers have free hand to scam their trader money easily.

I believe Non-Derivative are most trustworthy than derivative (Even the broker is regulated from FCA/ASIC/CFTC).

I am using Raw spread from ICmarkets Global. I find found any broker which have truly fixed spread.

Can someone explain what does ICMarket mean here by mentioning CFDs in Spot Forex

What’s the part you don’t understand? They’re just telling you that they are a counterparty market-maker and you are betting against them, they are not acting as a “broker” (as some naive people might imagine). But I know from your earlier questions and posts that you know this already. So I’m not sure what confused you?

Yes, there is forex trading that allows you to own real assets rather than just derivatives. This type of trading is done through the spot forex market, where currencies are exchanged in real-time and ownership of the actual currencies is transferred. Many forex brokers offer spot forex trading, including well-known ones like OANDA,, and IG.

Spot forex is considered non-derivative because it involves the actual exchange of currency pairs directly, without deriving its value from an underlying asset.

Term CFDs in Spot Forex

CFD is derivative and Spot Forex is non derivative. What does CFDs in Spot Forex mean

Oanda is CFD issuer not a spot forex. IG is also CFD

Sure, if there are legal restrictions on types of market access where a potential trader lives, the question is important. But for so many actual traders, it won’t make any difference to them what type they choose. Not being cynical but if they’re trading already and losing already, changing market access won’t make them winners.

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information from investopedia

What Is a Spot Trade?

A spot trade, also known as a spot transaction, refers to the purchase or sale of a foreign currency, financial instrument, or commodity for instant delivery on a specified spot date. Most spot contracts include the physical delivery of the currency, commodity, or instrument; the difference in the price of a future or forward contract versus a spot contract takes into account the time value of the payment, based on interest rates and the time to maturity. In a foreign exchange spot trade, the exchange rate on which the transaction is based is referred to as the spot exchange rate.

go to a bank in your country and exchange currencies

if you want to deliver cash use futures contract, CFTC regulation doesn’t guarantee delivery cash option.

I haven’t faced this issue yet, but perhaps you’re right. Different people have different experiences.

Can you name fixed spread forex broker?

But it takes lot of time to convert from one currency to another. Additionally no leverage and FX fees. Do you know any Forex broker which offers Spot Forex (with exchange market)

But it makes less manipulation. So, if price move in your direction atleast you make profit instead of loss.

Why don’t you learn to use Google rather than “challenging” other members on what they say?

It doesn’t work that way. It can’t work that way. If you still don’t understand why after being here for over 3 years, there’s not much point in trying to explain it to you. What you actually need to know was already said, above: a fixed-spread broker obviously won’t tolerate news trading for long, if the customer shows them he can take their money that way

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