Commission Structure
On Standard and Micro accounts, FXCM does not charge a commission on trades. Rather, the firm makes a profit by marking up the spread which traders must pay. In order to enter a trade, a trader must always pay the ask price, and to sell/short, must execute at the bid price. The spread is the difference between the bid and ask price. FXCM does not offer a fixed spread, which means the spread will vary, based on market liquidity. During high volume times, the spread will typically be relatively small, and during low volume times, the spread will be relatively wider. The firm uses fractional pip pricing

SEE: Spread-To-Pip Potential: Which Pairs Are Worth Day Trading?

Active Trader accounts do incur commissions, although spreads are typically smaller than what is available on Standard and Micro accounts.

Figure 2. Active Trader Commissions


Rollover is a not a commission, but can have a positive or negative impact on the profitability of a position if that position is held overnight. FXCM provides the current rollover rates right in the trading platform, so that traders can see how much they will gain if they are long a higher interest rate currency, or how much their account will be debited if they are long a lower interest rate currency.

SEE: Understanding Forex Rollover Credits And Debits.

Figure 3. Quote with Rollover (RollS and RollB)*
*Spread and roll rates are subject to change.

Forex brokers traditionally provide leverage or margin to their trading clients. FXCM provides maximum leverage of 50:1, or 2% margin. This means that the trader must put at least 2% of the value of the trade. For exotic currency pairs, the maximum leverage is 20:1. Spreads and commissions are applied to the full amount of the transaction, and not just the margin put up by the trader.

SEE: Top 7 Questions about Currency Trading Answered.

Next: FXCM Capital Markets; Customer Support And Analysis Tools »


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