CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data. *Availability subject to regulation.
With its close proximity to the United States, combined with its recent advances in accessibility to information technology, Mexico has emerged as a relatively open and welcoming market for products and services. In addition, as the world’s 15th largest economy, with a GDP of $1.15 trillion and a population of 132 million, Mexico forms part of the United States–Mexico–Canada Agreement (USMCA) trade agreement. The USMCA was introduced as somewhat of a replacement for the North American Free Trade Agreement (NAFTA), but is still pending ratification from its members.
In Mexico, the primary stock market is the Mexican Stock Exchange or Bolsa Mexicana de Valores (BMV) which was created from the regional stock exchanges of Mexico City, Guadalajara and Monterrey. The other Mexican stock market is the Bolsa Institucional de Valores (BIVA) founded in 2018. Both Mexican exchanges are based in Mexico City and have a similar product range.
In addition to providing a listing service for stocks and stock derivatives like warrants, the BMV also offers various Mexican fixed income products. These include Federal Treasury certificates (CETES), Investment Unit bonds (UDIBONOS), Federal Government Development bonds (BONDES), promissory notes, bankers’ acceptances, development bank bonds and commercial paper.
The BMV also lists mutual fund shares; in addition to a product similar to an exchange-traded fund (ETF) called a Title Referenced to Shares (TRAC), a participation certificate that represents equity investment trusts. The TRAC hold portfolios of listed company stocks, as well as a cash component.
The main stock index for the BMV is the Índice de Precios y Cotizaciones (IPC) that is the broad market indicator of a balanced market capitalisation-weighted selection of representative shares listed on the BMV from various economic sectors. In addition, the Indice Mexico (INMEX) is a narrower blue-chip market cap weighted index of 20 to 25 of the most highly marketable stocks listed on the BMV with market values of at least $100 million.
The Mexican national currency is the Mexican peso (MXN), which is further divided into 100 smaller units called centavos. The Bank for International Settlements (BIS) gave the Mexican peso the 11th place ranking among the most actively traded currencies in 2016, a total of about 2.1% of overall forex turnover. However, the peso did not rank individually among the most popular currencies reserved by central banks in 2018, as per the International Monetary Fund (IMF).
The key Mexican banking and securities sector regulator is the Comisión Nacional Bancaria y de Valores (CNBV) created in 1995. The CNBV is a decentralised arm of Mexico’s Ministry of Finance and has the task of promoting the financial system stability and protecting investors. CNBV oversees and regulates all financial institutions including banks, finance firms, stockbrokers and mutual fund companies. The Central Bank of Mexico (BdeM) or Banxico also oversees forex related activities.
For those interested in stock trading, the BMV and BIVA provide fair and transparent markets in several classes of Mexican securities, including stocks, bonds and funds. Note that stock exchange trades are generally executed in Mexican pesos. Moreover, the BMV exchange currently uses the trading software called the BMV-SENTRA equities system. Settlement occurs three business days after trading, and the market trades Monday until Friday during the hours of 8:30 a.m. to 2:00 p.m. for most securities, although trading hours do vary somewhat by product.
The asset classes that online brokers provide for their clients to trade online can differ substantially. Most brokers offer some kind of forex trading, whilst contract for difference (CFD) trading can also often be found, which usually allows traders to take positions in a much wider set of tradable assets.
While no major online forex brokers currently have offices in Mexico, traders living in Mexico can deposit money in Mexican pesos to trade online using margin accounts opened with brokers situated outside Mexico who will accept them as clients.
Note that any foreign broker should be competently regulated under their jurisdiction. Brokers should keep client funds segregated from their own to safeguard clients’ funds should any financial difficulties arise. They should also have a positive reputation with clients and a suitable range of services and tradable assets.
Almost all online brokers now provide demo accounts complete with virtual money allowing traders to practice trading, explore different strategies and to demo the broker’s services. Brokers sometimes also offer live trading accounts where traders must make a minimum deposit to begin trading. Additionally, certain brokers may provide a Sharia law compliant Islamic accounts that have no swaps or rollover fees for Sharia compliant traders.
Another consideration when selecting a broker will be if the broker offers their website information and customer service in Spanish. Virtually all brokers support communications in English, but many also provide support for Spanish, therefore, it is advisable to inquire in advance about this possibility.
While North American countries, like the United States and Canada, remain Mexico’s top and closest trading partners, Mexico currently has more free trade agreements than any other country. According to Gov.uk, Mexico currently enjoys 11 agreements over 44 countries, with a potential market access of up to 60% of the world’s Gross Domestic Product (GDP).
Other benefits listed by Gov.uk that Mexico can offer potential traders include:
Mexico’s ranking for trading across borders was 8th among countries surveyed by the World Bank. Mexico also ranked in the middle of the pack at 54th with respect to the overall ease of doing business in the country.
According to The World Bank, Mexico also had 37.9% ratio of its trade to GDP numbers in 2017, which could imply that the economy is rather resilient in relation to trade disruptions. Nevertheless, the country has experienced an ongoing and steady devaluation of the Mexican peso relative to the U.S. dollar, contributing towards an inflation rate of 4.41% as of April 2019.
As an overview, the World Bank ranked Mexico at 103rd in registering property, and 116th for the paying of taxes. In relation to the ease of starting a business it was placed 94th, dealing with construction permits at 93rd and obtaining electricity at 99th.
Overall, businesses and traders could find Mexico a rather open but at times uncertain economy to operate in. According to the World Bank, the country enjoys a higher ranking with regard to trading across borders, but ranks lower in relation to property registration and taxation.
When considering what online broker to trade with from Mexico, traders should ensure that they have a good range of asset classes, a strong reputation with clients, a trading platform that has the features they need, with strict regulations and oversight.
In essence, traders will want a broker that provides a secure place to make a deposit for margin purposes and that segregates its clients’ funds from its own money upholding good governance practices.
Forex.com scored best in our review of the top brokers for mexico , which takes into account 120+ factors across eight categories. Here are some areas where Forex.com scored highly in:
Forex.com offers one way to tradeForex . If you wanted to trade EURUSD
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.
Forex.com have a AAA trust score . This is largely down to them being regulated by Financial Conduct Authority, segregating client funds, being segregating client funds, being established for over 19
|Regulated by||Financial Conduct Authority|
|Uses tier 1 banks|
|Segregates client funds|
Want to see how Forex.com? We’ve compared their spreads, features, and key information below.
|USD/JPY Spread||0.90||DAX Spread||250.0|
|FTSE 100 Spread||150.0|
|Platform||MT4, Web Trader, NinjaTrader, Tablet & Mobile apps|
|Base currency options||USD, GBP, EUR|
|Funding options||Bank transfer, Cheque, DebitCard,|