FOREX.com vs. Interactive Brokers

This review compares the services of FOREX.com vs. Interactive Brokers, which are two of the best-known names in the online brokerage business. In brief, FOREX.com caters mainly to forex traders, while Interactive Brokers caters more to international multi-asset traders and investors. Determining which online broker would suit you better will depend on your trading needs and preferences since both offer excellent services but provide different user experiences.

In this article, we review and compare both forex brokers to help you decide which of the two would be right for your needs.

What is FOREX.com?

FOREX.com was founded as part of GAIN Capital Holdings to provide online brokerage services for the retail forex and contract for difference (CFD) markets. The FOREX.com broker business was acquired in 2020 by StoneX, an institutional-level financial services network with assets of $10.9 billion that serves 32,000 commercial clients and over 330,000 retail accounts across 180 countries, earning its position as a leading forex broker.

FOREX.com provides forex brokerage services to 420,000 customers in 18 countries across 5 continents. The broker employs more than 3,500 people and averages an impressive 0.19 seconds for trade execution, which is an attractive option for forex and CFD traders at all levels, including beginner traders.

FOREX.com lets you trade in over 500 markets and provides an easy-to-use trading experience and venue across more than 80 different currency pairs, popular equities and stock indices, commodities like silver and gold, a wide variety of CFDs and selected futures contracts. You can also open a free demo account so you can assess and test the broker’s services risk-free.

While FOREX.com does not offer negative balance protection to U.S.-based traders, if you are based in Europe, then you can open an account with FOREX.com (U.K.) to take advantage of ESMA-mandated security features like negative balance protection and guaranteed stop-loss orders.

Mobile App: FOREX.com’s impressive mobile app provides a clear interface that allows you to build custom watchlists and keep an eye on all of your favorite markets.

The app features other useful trading tools including Performance Analytics to examine specific trading behaviors and habits and the Smart Signals signal generator tool that alerts you to trading opportunities identified by FOREX.com’s exclusive trading algorithms.

The fully customizable mobile app also provides advanced charts packed with helpful features including the ability to trade directly from charts, 80 technical indicators, multiple chart types, 14 time intervals and advanced drawing tools.

Instruments: FOREX.com gives you access to trade forex currency pairs, unleveraged spot gold and silver and a wide range of CFDs. You can also trade futures and options on futures through its affiliate, FuturesOnline. FuturesOnline lets you trade futures on the Smalls Exchange, which offers standardized index futures contracts with smaller lot sizes than those of regular futures contracts.

The types of CFDs you can trade through FOREX.com include:

• Forex: Currency pairs you can trade via CFDs include AUD/USD, EUR/GBP, EUR/CHF, EUR/JPY, EUR/USD, USD/CAD, USD/CHF, USD/JPY, XAU/USD, GBP/JPY, GBP/USD and NZD/USD.
• Indices: You can trade CFDs on the Australia 200, China 50, EU Stocks 50, France 40, Germany 40, Hong Kong 50, Italy 40, Japan 225, Netherlands 25, Singapore Index, Spain 35, Switzerland 20, U.K. 100, U.S. Small Cap 2000, U.S. S&P 500, U.S. Tech 100 and the Wall Street Index.
• Stocks: You can trade CFDs from the long or short side in over 5,500 stocks of the top companies in the world commission-free via a FOREX.com account. You can also trade in the aftermarket and pre-market as well as during standard stock market trading hours.
• Commodities: FOREX.com lets you trade commodities like coffee, U.K. and U.S. crude oil, corn, cotton, heating oil, cocoa and sugar. You can also trade four precious metals and six gold currency pairs such as XAU/AUD and XAU/CHF.
• Cryptocurrencies: You can participate in cryptocurrency trading CFDs on Bitcoin, Ethereum, Litecoin and Ripple via FOREX.com.

Minimum trade amount: Depending on the account type you select, FOREX.com supports trading in standard lot sizes of 100,000 base currency units, mini lots of 10,000 base currency units and micro-lots of 1,000 base currency units. 

Regulators: FOREX.com has been a registered Retail Foreign Exchange Dealer (RFED) and a registered Futures Commission Merchant (FCM) with the U.S. Commodities Futures Trading Commission (CFTC) since 2004, as well as being a member of the U.S. National Futures Association (NFA) operating under NFA ID number #0339826.

What Is Interactive Brokers?

U.S.-based Interactive Brokers, Inc. (IBKR) is a multinational broker-dealer with offices in the U.S., Canada, the U.K., Hungary, Ireland, Hong Kong and Shanghai in China, Japan, Singapore, Australia and India. Founded in 1977 by trader Thomas Peterffy as T.P. & Co, Interactive Brokers completed its 45th year in 2022 as a broker-dealer with over $10.9 billion in consolidated equity capital.

Interactive Brokers provides direct access to over 150 different worldwide markets. The broker is represented on many major world stock and commodity exchanges, and it offers trading in forex, stocks, futures, listed options, bonds, gold and cryptocurrencies.

The proprietary trading platforms offered by Interactive Brokers feature its flagship desktop Trader Workstation (TWS) and its web-based Client Portal. Other platforms available at IBKR include the IBKR EventTrader and IMPACT, a specialized app for ESG-focused investors. You can also get access to IBKR’s mobile applications IBKR Mobile and IBKR GlobalTrader, a simple app for trading stocks, options and cryptocurrencies. IBKR’s trading cost and narrow forex dealing spreads are among the best in the business, making it a preferred choice for many.

Through IBKR’s FXTrader, you get access to an optimized trading interface with appropriate tools for currency markets. These tools include real-time streaming quotes, up and down indicators, pending trades, positions, trading volume and average price plus profit/loss scenarios.

IBKR offers its traders some of the best margin rates and narrowest forex dealing spreads in the business, with some spreads as low as 1/10 of a pip. The broker currently has no minimum deposit for a retail trader to open an account, although it requires other brokers to deposit at least $10,000 initially to open a broker account.

Mobile App: Yes

While IBKR does not actively promote or offer other platforms or add-on software of outside vendors, the TWS operates with an open application programming interface (API). The API allows third-party vendors to create scripts for the TWS. MetaQuotes Software and oneZero partnered to offer the oneZero Hub Gateway that allows MetaTrader 5 to be used to trade IBKR accounts. oneZero is not available for individual accounts.

Instruments: Offering perhaps the best selection of tradable assets and investment products of any online broker, Interactive Brokers will suit the needs of retail and professional multi-asset traders and investors worldwide.

Trading and Investment products:

• Forex: You can trade spot currencies in 100+ currency pairs.
• Cryptocurrencies: IBKR gives you access to trade and hold Bitcoin, Bitcoin Cash, Ethereum and Litecoin with commissions as low as 0.12% to 0.18% of the trade’s total value. You can trade and hold additional digital tokens through an enhanced web application from Paxos Trust Company.
• Stocks: You can trade stocks globally on over 90 different market centers with some of the lowest financing rates in the business from USD 4.33% to USD 5.33%. U.S. clients pay $0 commissions for stock and exchange-traded fund (ETF) transactions using IBKR Lite. You can also trade fractional shares that let you invest regardless of stock price.
• ETFs: IBKR not only lets you trade ETFs for $0 commissions, but you can also participate in its Commission Rebate Program. The broker’s no transaction fee (NTF) program offers 150 ETFs that reimburse IBKR clients for commissions paid on ETF shares held for at least 30 days.
• Options: Trade options globally in over 30 market centers. Commissions of $0.15-0.65 per contract apply to U.S. equity options transactions. Interactive Brokers does not offer OTC forex options, but you can trade forex options on the seven currencies offered by the Nasdaq PHLX (formerly the Philadelphia Stock Exchange) that include AUD, GBP, CAD, EUR, JPY, CHF and NZD versus the U.S. dollar.
• Futures: Through IBKR, you can trade futures on currencies, cryptocurrencies, fixed income, interest rate, metals, energy, soft and agricultural commodities and volatility and equity indices. Commissions for futures range from USD $0.25 to $0.85 per contract, in addition to exchange, regulatory and carrying fees.
• Event contracts: The IBKR EventTrader platform allows traders to buy and sell event contracts that have a payout based on a given outcome. These binary option-like contracts are based on the short-term outcome of an event and are only good for the trading day the position was initiated on. An example of the type of event that you can trade an event contract on includes whether the S&P 500 Index or some other tradable asset will close above or below a certain level.
• Commodities: U.S. Spot Gold (USGOLD) can be traded in quantities as low as 1 ounce. Commissions for USGOLD at IBKR are 1.5 basis points (bps) of trade value for up to $500,000 worth of gold, 1.0 bps for $500,000 - $1,000,000 and 0.7 bps for gold orders over $1 million in value.
• Bonds: IBKR lets you trade over 1 million different bonds globally with no markups or built-in spreads. You can trade 41,585 corporate bonds, over 1 million municipal securities, 22,867 certificates of deposit and non-U.S. sovereign bonds. You can also use the broker’s Bond Search tool to compare available yields, and you can trade bonds with other IBKR customers. Benzinga has rated Interactive Brokers as the “Best Online Broker for Bonds.”
• Mutual funds: With IBKR, you can trade over 46,000 mutual funds listed in IBKR’s Mutal Fund Marketplace. IBKR’s low transparent commissions on mutual funds inside the U.S. cost the lesser of $14.95 or 3% of the trade value. Outside the U.S., commissions are EUR 4.95 or the local currency equivalent.
• Hedge funds: If you meet the eligibility requirements that include an account minimum of $25,000 and are accepted into the program, you can invest in 50 hedge funds listed in IBKR’s Hedge Fund Marketplace via a password-protected area on the IBKR website. You can download hedge fund information, and you can easily transfer funds from the hedge fund to your IBKR account after subscribing to the program.
• Minimum trade: Minimum trade amounts at IBKR depend on the type of asset involved. Retail forex traders can trade in standard lots of 100,000 base currency units and mini lots of 10,000 base currency units.

Regulators: As a U.S.-based company, Interactive Brokers has oversight from the Commodities Futures Trading Commission (CFTC) and is a member of the New York Stock Exchange and the National Futures Association (NFA) with NFA ID: 0258600.

The global broker also maintains memberships on most major world stock and commodities exchanges. Because of its worldwide presence, with representation in 150 markets in 33 countries, IBKR has oversight from most major world regulators, including the U.K. Financial Conduct Authority (FCA) under Reference Number 208159.

FOREX.com Fees and Commissions

FOREX.com’s dealing spreads vary based on prevailing market conditions. These include volatility and available liquidity among other factors. On the broker’s website, “typical” spreads represent the median spread seen over the observation period, while the stated “as low as” spread represents the minimum dealing spread quoted during the last full calendar month. These numbers are adjusted every first trading day of the calendar month. The spreads noted below represent spreads outlined on the FOREX.com website.

Interactive Brokers Fees and Commissions

Interactive Brokers offers some of the lowest fees, commissions and margin rates in the business. Also, if you’re an active trader, you can get significant volume discounts based on your activity level.

Because of IBKR’s combined quotation streams from 17 of the world’s largest foreign exchange dealers, dealing spreads can be as low as a fraction of a pip. Because it provides this transparent pricing structure and instead of marking up quotes and charging no commission, a commission is charged by IBKR based on the combined Monthly Trade Value of Spot Currency trades.

You can check out IBKR’s 4-tier commission schedule at this link, which shows that the higher your aggregate monthly trade value is, the lower the commissions you pay will be. For example, Tier I starts at a monthly total trade value of less than or equal to $1 billion and involves a fee of 0.20 basis points with a $2.00 minimum charge per order. Tier 4 for those with over $5 billion in total monthly trade value involves paying a commission of just 0.08 basis points and a minimum charge of $1.00 per order.

On the downside, IBKR does charge retail investors who qualify for negative balance protection an additional 1% financing spread for any CFD positions held overnight.

The sample dealing spreads noted below come from the IBKR live quotation screen that appears in the broker’s proprietary FXTrader platform.

FOREX.com Research Offerings

FOREX.com’s research and educational offerings come free of charge and give you access to training and the latest market news and research. Found on the top of the FOREX.com website’s Home page, the News and Analysis drop-down menu provides a variety of useful items that help you get educated about forex trading and keep abreast of happenings that affect the forex market. It includes the following features:

• Forex trading news and economic research, including current market news and economic data releases
• Market analysis that includes an economic calendar, pivot points, trade ideas and market insights
• Webinars that include major economic releases and yearly market outlooks
• Trading courses for beginner, intermediate and advanced forex traders
• Trading themes including risk management and fundamental analysis

Interactive Brokers Research Offerings

Interactive Brokers provides traders with access to a wide range of premium market research and news providers either free of charge or for a subscription fee. Research services are also available to demo account holders without additional funding or approval.

• Bundled research: If you’re willing to pay for research, you can access bundles such as Dow Jones, Briefing.com, The Fly, Trading Central and MT Newswires in a variety of combinations for different prices.
• Research and news: Under IBKR’s research tab, you’ll find various portals that offer research and news services available either free of charge or for a subscription price.
• Market events: You can access services such as Econoday, Refinitiv and Wall St. Horizon to stay informed about major market-moving events.
• Alternative data: IBKR lets you access alternative data providers like Estimize and Alexandria Research.
• Third-party tools: If you plan on doing algorithmic trading or need a fundamental valuation platform, you can access tools like QuantConnect or Stockcalc for a free trial.

FOREX.com vs. Interactive Brokers, Which Works Best for You?

Both FOREX.com and Interactive Brokers are well-regulated and reputable online brokers that serve as top trading partners to their targeted clientele. Depending on whether you plan on trading forex more or less exclusively or if you want to trade other asset types worldwide, the choice between Interactive Brokers and FOREX.com can easily be made.

FOREX.com makes a lot of sense for forex traders, especially if they’re already familiar with and want to use the NinjaTrader platform or the MetaQuotes platforms (MT4 and MT5) that support easy algorithmic trading and strategy backtesting.

Also, less experienced forex traders can access educational materials geared specifically towards the forex market at FOREX.com, while the educational resources at Interactive Brokers tend to cater to more experienced traders and cover a variety of different financial markets.

On the other hand, if you’re an advanced trader who wants to operate globally and manage other assets besides currencies, such as stocks, bonds and other types of investment assets, you would probably be better off trading through Interactive Brokers, since FOREX.com deals exclusively with forex and CFDs.

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Disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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