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for EURUSD

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Markets.com

Offers five ways to trade: Forex, Shares, Indices, Commodities, ETF and CFD

 
Markets.com
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$100Min. Deposit Learn More
  • MT4
  • WebTrader
  • Mobile apps
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  • Market Maker
  • DMA
  • ECN
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Trust Score:

B

Established in:

2008

Regulated by:

CySEC, Financial Services Boar...

CFDs are leveraged products and can result in the loss of your capital. Rankings are influenced by affiliate commissions. All information collected on 1/11/2017.

The Ultimate Guide to

Choosing a Broker
For Market Maker

Not sure which broker is right for you?

Don’t worry - we’ve got you covered. In this guide, you’ll learn:

Ready?

Part 1

Why Choose Markets.com
For Market Maker?

Markets.com scored best in our review of the top brokers for market maker, which takes into account 120+ factors across eight categories. Here are some areas where Markets.com scored highly in:

  • 9+ years in business
  • Offers + instruments
  • A range of platform inc. MT4, Web Trader, Tablet & Mobile apps
  • 24/7 customer service
  • Tight spreads from 2.0 pips
  • Used by + traders
  • Allows hedging
  • 5 languages
  • Leverage up to 100:1

Markets.com offers five ways to trade: Forex, Shares, Indices, Commodities, ETF and CFD. If you wanted to trade EURUSD through copy trading or other means, skip to part two.

The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.

Markets.com have a B trust score, which is good. This is largely down to them being regulated by CySEC, Financial Services Board, segregating client funds, being established for over 9 years, and much more. For comparison:

Trust Score comparsion

Markets.com
Trust Score B
Year Established 2008
Regulated by CySEC, Financial Services Board
Uses tier 1 banks
Company Type Public Private Private
Segregates client funds

The second thing we look for is the competitiveness of the spreads, and what fees they charge. We've compared these in detail in part three of this guide.

Part 2

Who Markets.com is (& Isn’t)
Suitable For

As mentioned, Markets.com allows you to trade in five ways: Forex, Shares, Indices, Commodities, ETF and CFD.

Suitable for:

  • CFD Trading
  • Forex Trading

Not Suitable for:

To trade with Markets.com, you'll need a minimum deposit of $100. Markets.com offers a range of different account types for different traders including a mini account, vip account.

Finally, Markets.com isn't available in the following countries: AF, DZ, AS, AO, AU, BE, BA, BR, KH, CA, CN, CU, KR, GU, GY, HK, ID, IR, IQ, IL, JP, LA, MO, MY, MM, NZ, MP, PA, PG, PH, PR, RU, SG, KR, SD, SY, TW, TH, TR, UG, VI, VU, USA, VN, YE.

Part 3

A Comparison of Markets.com vs. vs.


Want to see how Markets.com stacks up against and ? We've compared their spreads, features, and key information below.



Spread & fee comparsion

The spreads below are illustrative. For more accurate pricing information, click on the names of the brokers at the top of the table to open their websites in a new tab.
Markets.com
Fixed Spreads
Variable Spreads
EUR/USD Spread 2.0
GBP/USD Spread 2.0
USD/CAD Spread 3.0
USD/JPY Spread 3.0
DAX Spread 2
FTSE 100 Spread 2
S&P500 Spread 1

Comparison of account & trading features

Markets.com
Spread type Fixed
EUR/USD Spread 2008
EUR/GBP Spread CySEC, Financial Services Board
Crude Oil Spread
Gold Spread Public Private Private
DAX Spread

Part 4

Market Maker vs No Dealing Desk: Which is the best broker for you?

Before you make a choice between the NDD brokers and the MM brokers, it is essential to understand what the two brokerage models are all about.

What is a MM (Market Maker) Broker

MM brokers refer to brokers who are classified as market makers. These are brokers who operate a dealing desk and therefore “make the market” by acting as full-scale intermediaries between traders and the liquidity providers. Market makers have the following characteristics:

  1. Market makers act as trade counterparties. How do they do this? They make the market by pushing in liquidity to buy up positions from the liquidity providers, then splinter these into smaller chunks and resell same to their clients. Since they are basically reselling positions with marked up spreads, they are basically the opposing side to any position taken on the platform. So they buy from traders who are selling and sell to traders who are buying.
  2. Market makers operate a dealing desk. All orders placed by their traders go through a specialised department called the dealing desk, which is essentially a trading station that handles and routes orders from traders.
  3. Market makers offer their clients fixed spreads.
  4. Market makers do not charge a commission. Their compensation comes from spreads and also from counter-trading traders in losing positions.
  5. The price quotes that are sent to traders are not the same as those which come from the liquidity providers. The quotes are usually marked up.

Pros Market Maker Brokers

  • Market makers typically do not require high initial deposit amounts from their clients.
  • Spreads are fixed.
  • Platforms of market makers are typically more user-friendly, since most of their clients are not professional traders.
  • Market makers provide a lower entry point for traders since their activity boosts liquidity in the forex market.

Cons of Market Maker Brokers

  • Price quotes are different from that sent by liquidity providers, thus opening the way to price manipulations. Stop hunting is a popular method of price manipulation by market makers.
  • By acting as both umpire and the opposing player, market makers do not provide conditions that favour transparency and fairness in trading activity.
  • Requotes is a common complaint with market maker brokers.

What is a No Dealing Desk (NDD) Broker

NDD forex brokers is the second category of brokers. These are brokers who have the following characteristics:

  1. Do not operate a dealing desk. This means that they merely act as an intermediary between the trader and the price provider (major banks or liquidity providers).
  2. NDD brokers pass on the trader’s orders straight to the major banks (straight-through processing) and do not make the market. This enables trades to be carried out electronically without human intervention.
  3. Due to the fact that processing of orders is directly from liquidity provider to end-user (trader), there is a lower chance of requotes and there is no need for traders to confirm orders before their orders are executed when prices are moving rapidly.
  4. NDD brokers make their money by charging a commission on both sides of an order (entry and exit), as opposed to the spread.

There are also to sub categories of NDD brokers:

  1. STP Forex Brokers
  2. ECN Forex Brokers.

The difference between the two models is that while the STP model sometimes offers a restricted number of liquidity providers, ECN brokers tend to offer more liquidity providers and therefore give traders a better choice in pricing. This is an important distinction because some brokers may claim to be a STP NDD broker and simply route their orders to a single liquidity source, a MM broker which they also own.

Some brokers may also run a hybrid model where they execute larger trades via the STP model and their smaller trades through a traditional MM model. This is because liquidity providers will not accept the smaller trades made possible through the MM model.

Pros of Trading Non-Dealing Desk brokers

The major benefits of trading with NDD brokers are:

  • Anonymity of trading process. Many retail brokers have expressed concern from their trading experience that certain moves that went against them felt like someone was actually watching their positions. In fact, this is true with MM brokers. But when you trade with NDD brokers, your orders are executed anonymously with no dealing desk department monitoring your every move.
  • Better fills: Traders who use NDD brokers get better fills without slippage for their orders. This is because there is the option of choosing from several price quotes from different liquidity providers, and this provides for a more open market without requotes.
  • Transparency: With NDD brokers, what you see is what you get. The broker is not the counterparty. Therefore, a situation where the opposing player is also the umpire does not arise.
  • Better spreads, albeit variable: Since there are several liquidity providers providing different bid and ask prices, traders have the opportunity to make a choice of the best pricing for their positions.

Cons of Trading with NDD Brokers

Although there are many advantages with NDD brokers and there are some disadvantages. The main barriers to using a NDD broker include:

  • Costly trading: Perhaps the most striking disadvantage of trading with NDD brokers is the cost of trading. In addition to paying spreads, traders must also pay a commission on both the entry and exit side of the trades. Imagine losing a trade and still having to pay a commission for entering and closing such a trade. It is quite painful to do this but that is how it is when trading on the platform of a NDD broker.
  • During period of high market volatility, spreads can widen considerably, thus adding to the cost of trading.
  • High capital requirements: NDD brokers typically request for high initial deposits for account operation.

The main factor to choose a MM or NDD broker

Typically, traders with a small amount of capital can only open and operate accounts with dealing desk brokers or market makers. This is because capital requirements are much smaller and the platforms offered are easier to use.

Because NDD brokers charge a commission per trade or on a per month volume, it is not economical for smaller traders to use a NDD broker. More often it will be cheaper for a trader with a smaller account to use a “no commission” MM broker, where they are only paying the difference in the spread per trade.

Hence the main factor will be your deposit size and trading activity. If you are a high volume trader and meet the minimum deposit requirements for an ECN account, a NDD is generally the best option. For example to qualify for an ECN account with LCG, clients have to maintain a minimum $10,000 account balance. On top of that, to qualify for their lowest commission tier, clients must have a trading volume of over $2 billion per month.


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