The last of the ‘major’ spread betting companies that I am reviewing in detail here is FXCM, and indeed one could argue that they should not be in the list at all, having only recently entered the UK spread betting market as late as 2009. However, it is their sheer size which merits an entry, along with the fact that they have recently acquired ODL Securities in the last few weeks, indicating a clear intent to further dominate this market both in the UK and elsewhere in Europe.

The history of FXCM is startling when one considers that fact the company was only founded in 1999 as Forex Capital Markets LLC,  now known as FXCM, and since then has risen to dominate the world of spot fx trading, with revenues in excess of $300 million dollars in 2008,  since rising in 2010 to over $600 million dollars. With over 150,000 live trading accounts and an average of 7 million trades executed each month, FXCM truly dominate the world of forex, but what of spread betting?

With it’s main headquarters in New York, the company opened it’s first office in London in 2002, but it was only on the 5th March 2009 that the company finally unveiled its spread betting platform for UK clients, and therefore in the context of the other spread betting companies listed here, a very short track record indeed! However, whilst their entry to the market may have been late, they are now making a concerted push for market share, and the acquisition of ODL will no doubt send a strong signal to the other big players in the industry.

One of principle characteristics of FXCM, which has made it such a dominant player in the global fx market, is the fact that the company offers a no dealing desk execution service, which in essence means that trades are not handled by the broker, but are priced in the market. This removes one of the major criticisms levelled at OTC trading with a broker whether in spread betting, forex, or any other market, and this is simply that a no dealing desk removes any risk that the broker is trading against the client, or manipulating prices or orders in a fast moving market.

The trading platform provided for FXCM spread betting clients offers one click execution, and each window displays both the trade as well as all finance charges, so there is full cost transparency on each bet. Typical spread bet margins vary between 1 and 10% and they also guarantee not to re-quote, typically a major area of conflict with some spread betting companies and their clients. As you would expect for a company of this size, they offer spread bets on all the major markets and indices along with commodities, and of course forex, but in the context of other spread betting companies, their product offering is more limited and does not cover areas such as bonds, interest rates, options or equities at present. However this will no doubt change in the future! The key markets and spreads are as follows :

Main Indices

  • FTSE 100  – the spread is 2 index points and the minimum bet size is £1
  • DOW 30 – the spread is 4 points and the minimum bet size is £1
  • SPX 50 – the spread is 0.8 point and the minimum bet size is £1
  • Germany 30 – the spread size 2 point and the minimum bet size is £1
  • Japan 225 – the spread size is 25 points and the minimum bet size is £1

Major Currency Pairs

  • EUR vs USD – the minimum spread is 1 pip and the minimum bet size is £1
  • GBP vs USD – the minimum spread is 1 pip and the minimum bet size is £1
  • USD vs CAD – the minimum spread is 1 pip and the minimum bet size is £1
  • USD vs JPY – the minimum spread is 1 pip and the minimum bet size is £1
  • AUD vs USD – the minimum spread is 1.1 pip and the minimum bet size is £1

Commodities

  • US light crude – the minimum spread  is 8 and the minimum bet size is £1
  • Gold – the minimum spread is 0.5 and the minimum bet size is £1
  • Silver – the minimum spread is 0.05 and the minimum bet size is £1

As you will note, FXCM does not offer the option of trading in equity markets at present, but as I said before, no doubt this will change shortly now that the company owns ODL Securities so watch this space.