FXCM Releases Detailed Execution Study
Hi Everyone,
We recently completed a study that examined the quality of execution for FXCM client orders versus the three largest FX trading venues globally, venues widely considered to represent the benchmark for reliable FX pricing, and I wanted to share these results with you.
The data show FXCM retail client order prices to be better than the Futures Market and Interbank Market prices for FX*.
One of our most important business goals is to provide superior execution. We have made it our mission each year to pioneer ever increasing levels of quality pricing and execution services, the bedrock of your trading experience. We believe in so doing, you, our traders, can be confident and trust in us as your broker.
Below are highlights from the full whitepaper that you can
download^.
Compared to the Futures Market:
FXCM was equal to or better* than the quoted futures price 90.83% of the time compared to the spot equivalent quoted futures price on the CME.
- Better than the futures price: 86.47%
- Equal to the futures price: 4.36%
- Worse than the futures price: 9.17%
Thus leading to a potential savings of $36,350,525 for FXCM LLC clients^. Our FXCM LLC represents less than 25% of our entire client base. Extrapolated out to our global audience would be
potential savings greater than $145M^.
Compared to the Interbank Market:
FXCM was equal to or better* than the Interbank price 95.31% of the time.
- Better than the interbank price: 92.19%
- Equal to the interbank price: 3.12%
- Worse than the interbank price: 4.69%
Thus leading to a potential savings of $55,121,988 for FXCM LLC clients^. Our FXCM LLC represents less than 25% of our entire client base. Extrapolated out to our global audience would be
potential savings greater than $220M^.
Why is FXCM’s Pricing Better for Retail Clients?
FXCM liquidity providers are only allowed to be price makers for our retail clients and not price takers. Only our retail clients can take a price which protects the market maker from potentially being run over by larger or faster predatory market takers, making them more comfortable and giving them the ability to make a market based on quality of price and liquidity rather than speed, leading to a better trading environment. Thus, FXCM is able to offer lower pricing^ and a better trading environment for its retail clients*.
Click here for a detailed presentation of the study along with FAQs
Our service includes products that are traded on margin and carry a risk of losses in excess of your deposited funds. The products may not be suitable for all investors. Please ensure that you fully understand the risks involved.
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* The study does not in away way attempt to represent that FXCM maintains a particular capacity or performance level. Past results are not indicative of future performance.
^ The figures in this study are provided for information purposes only, and are not intended for trading purposes or advice. FXCM is not liable for any information errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein.
Material Assumptions
FXCM’s Retail Clients are defined as individual, joint, and corporate accounts trading on our retail price stream.
The comparison to each of the Futures and Interbank data is made at the time that the FXCM client order is executed. Normal market slippage and slippage due to rejections by liquidity providers are already included by the time the FXCM client order is executed. However, there is an assumption that there is no slippage on the Futures or Interbank market data.
In order to maintain consistency, Futures Market data and Interbank data used the same acceptable ranges in market trades. The summary of findings is based on the assumption that the maximum acceptable difference between the FXCM price and the Interbank/Futures market price is 5 pips in either direction.
Fees that a participant would pay on the Futures or Interbank market, such as CME Exchange Fees, NFA Fees, FCM Fees, Clearing Fees, and other commissions, were excluded from the study. Similarly, FXCM Commissions are excluded from the study.