Wednesday 16 September 2020 11:14 amFXCM Talk

Commission-free stock trading marks a new era for retail traders

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Having joined FXCM in 2001 just out of college, Brendan has held various positions within the company over the last 15 years and was appointed Global CEO in 2017.

Modern technology has made retail trading accessible to all – literally at the tip of our fingertips – but it wasn’t always this easy. It’s fair to say that the technology underpinning online retail trading has come a long way since the days of pagers and dial-up modems (look it up, kids…).

As we enter a new decade, the trading landscape for retail traders is set to enter a new era. Costs have reduced so substantially that the idea of ‘free’ trading is now entering the mainstream. 

While this marks a welcome change from the days when the cost of a single trade was in the double digits, these new models are not as simple or transparent as it may seem. 

Look under the hood and you’ll notice a whole host of question marks, caveats, if and/or buts that make you wonder if trading really is ‘free’. As a result, where this leaves a retail trader in terms of execution quality varies significantly. 

Choosing your ‘commission-free’ trading provider 

When choosing a broker to trade with, read the terms and conditions closely to make sure it’s right for you and take a closer look at the wider business model. If trading is ‘free’, how does the broker make money, and is this transparently communicated? 

Don’t accept shortcuts. A trading provider needs to incorporate and connect to a whole host of liquidity providers, exchanges, tech providers and risk systems to provide a safe and secure operation. 

Lastly, check that the company or broker you are trading with is regulated with the FCA or another reputable industry body. Some trading providers use e-money licences or passporting, so it’s important to be aware of these differences. 

FXCM Stocks – a unique collaboration

When FXCM planned its expansion into equity trading, it was clear from an early stage that while commission-free trading would form an important pillar of its offering, it would apply to certain products and up to a certain volume.

However, FXCM went one step further. We decided to work with one of the giants of the equity trading world – Interactive Brokers – and utilise their best-in-class technology to launch FXCM Stocks

Interactive Brokers is a global market leader in the global trading and equities market and has been for several decades. The combination of our joint expertise, market knowledge and technology gives us a unique edge that we believe start-up providers simply cannot match.

FXCM Stocks allows clients to access their trading portfolio via a dedicated online and mobile trading portal. This offers a unique opportunity for retail traders to benefit from commission-free* trading, along with cutting-edge trading technology. 

FXCM Stocks offers trading for US, UK, Hong Kong and European stocks in its first phase – with more to follow in time. With this service, clients will benefit from competitive pricing, efficient execution speeds and lower transaction costs, while FXCM Stocks makes its money from the spread.

**Only applies to certain products up to a certain volume. Learn More about FXCM Stocks pricing and commissions.

Drawing on our market expertise

FXCM has a unique history when it comes to offering trading services to retail traders. It is already one of the world’s largest retail brokers and a leader in online trading. Whether it’s foreign exchange, cryptos, commodities, metals, energy products or stock indices, we have a track-record that has stood the test of time.

As was the case when launching into other asset classes, our industry know-how and partnerships established over two decades enabled us to take a unique approach. It’s a big part of why FXCM has been in business for the past twenty years.

Stock trading carries risks. Please ensure that you fully understand all risks associated with stock trading, and seek advice from an independent financial advisor if you have any doubts. Read the full risk warning.

The material on this article is intended for information purposes only. Any trading symbols displayed are for illustrative purposes only and do not constitute recommendations or investment advice.

FXCM LTD is an operating subsidiary within the FXCM group of companies (collectively, the “FXCM Group”). All references on this site to “FXCM” refer to the FXCM Group.

FXCM LTD is authorised and regulated in the United Kingdom by the Financial Conduct Authority. Registration number 217689. Registered in England and Wales with Companies House company number 04072877. For more information on the stock trading accounts services provided through FXCM LTD, please refer to the “About Us” section on the website.