We’ve had a lot of questions about the new spreads + commission being rolled out, so I’ll be posting updates in this thread to keep everyone up to date. Please feel free to post any questions as well.
New Raw Spreads + Commission Pricing Model
1. What spreads can I expect to see? Here’s a look at the weighted average spread between July 2 and July 31 of this year for the most popular currency pairs.
*In some instances, accounts for clients of certain intermediaries are subject to a markup.
These are the average spreads we’ve seen. While not typical, the spreads can actually go inverted.
2. What is the commission schedule? The commission is $4 per 100k per side for the most commonly traded currency pairs and $6 per 100k for all others.
3. How does the new spread + commission compare to the old pricing? The trading cost has been cut by over 50% for some major currency pairs. Here’s an example of the transaction cost for a 100k EUR/USD trade under the old and new pricing model.
4. What’s the catch? No catch. We used to include our compensation in the spread as a mark-up. Typically this was a pip on either side of the spread our liquidity providers streamed directly to us. This means if the best raw spread from our liquidity providers was 0.5 pips, you would see a 2.5 pip spread on the platform. We have decided to make our pricing more transparent by removing the mark-up and charge a separate commission. At the same time we have negotiated better spreads from our liquidity providers. You trade on the exact bid/ask quotes that stream from our liquidity providers, and FXCM’s compensation is the commission. We believe the new transparent pricing model is a win/win for us and our traders. Traders save on their transaction costs and trading volume will likely increase.
5. When will I see the lower spreads? It depends which FXCM entity you opened your account through. We’ve received lots of feedback from traders excited to switch over, but the transition is being done region by region 1) to ensure we follow regulatory requirements for due notice to traders which vary by regulator and 2) ensure an orderly transition within our own system so as not to negatively impact our traders. Here’s a look at the regions I can discuss so far:
[ul]
[li]United States and France: If your account is with either one of these locations, your account has already been switched to the new pricing.
[/li][li]Germany: You can request to upgrade to the new pricing by contacting customer support.
[/li][li]UK and Australia: Check the website this weekend for new pricing information, and an email later next week with more information on the upgrade.
[/li][/ul]
Let me know if you have any questions.
[B]MT4 Pricing - Common Question[/B]
The new pricing model is available on MT4. When you login to a demo, you will see the new pricing reflected in the Market Watch window. These are the prices that are available to you for trading. However, the prices you see on the chart will display the old pricing model quotes. This is because MT4 servers can only show one price feed at a time. Since the majority of our clients are still on our old pricing, we have not yet been able to update the chart price feed.
These chart prices will be updated in the near future to reflect our new pricing as more of our existing clients have their accounts upgraded. While I don’t have an exact date yet, I will keep you posted.
EDIT: In order for you to see the new pricing on an MT4 demo account, you need to register for the demo from the website. Downloading the platform and [U]registering for a demo from the platform will create a demo on the old pricing.[/U]
If you watch the live rates on our website you may have noticed spreads sometimes go negative, or inverted. While inverted spreads are not typical, they can definitely occur and are tradeable. An inversion occurs when the bid price is higher than the ask price. If you watch the spreads widget on our website you can see them occur every now and then as shown in this screenshot:
The spreads widget only updates every couple of seconds. A better way to see exactly how often inversions are occurring is by looking at a tick chart. I circled in green each instance of an inversion on the tick chart during this roughly 90 second period. The blue line is the bid and the red line is the ask.
The pricing you see on NDD forex execution is the direct raw pricing being streamed from 10+ liquidity providers. The spread you pay is the cost paid to the liquidity provider and the commission is FXCM’s compensation.
Just a reminder that this weekend, accounts in the UK (excluding spread betting accounts) and Australia will be upgraded to FXCM’s new pricing.
This Wednesday, FXCM will be hosting a live webinar on Price Action, a trading technique that can help you read the market and make trading decisions from chart-based price movement, rather than relying on indicators. You will also learn how to take advantage of our super-tight raw FX spreads in combination with a Price Action strategy.
In some instances, accounts for clients of certain intermediaries are subject to a markup.
This live webinar will be offered at 3 different times this Wednesday.
[ul]
[li]Price Action Webinar at 07:00 GMT - click here reserve your place
[/li][li]Price Action Webinar at 13:00 GMT - click here reserve your place
[/li][li]Price Action Webinar at 17:00 GMT - click here reserve your place
[/li][/ul]
Another update: Spread betting accounts for traders in the UK and Ireland have now been upgraded to FXCM’s new pricing: Spread Betting - FXCM UK
