IC Markets vs XM: A Brief Overview
Both IC Markets and XM are well-established global brokers offering a wide range of trading instruments, including forex, indices, commodities, and cryptocurrencies, primarily via CFDs. While they both cater to a diverse client base, their approach to fees and overall trading environments can differ significantly, which is crucial for UK traders to understand.
IC Markets is renowned for its raw spreads and commission-based pricing, especially popular among high-volume and algorithmic traders. XM, on the other hand, often highlights its execution speed and a broader range of account types with varying fee structures, including commission-free options.
Core Trading Costs: Spreads and Commissions
The primary trading costs you'll encounter with any broker are spreads and commissions. The combination of these two determines your overall transaction cost for each trade.
Spreads
Spreads are the difference between the bid and ask price of a trading instrument. A tighter spread means lower immediate transaction costs.
* IC Markets: Known for offering some of the tightest raw spreads in the industry, particularly on its Raw Spread and cTrader accounts. These spreads are typically very close to zero pips on major currency pairs, especially during liquid market hours.
* XM: While XM also offers competitive spreads, especially on its Standard and Micro accounts, they tend to be slightly wider than IC Markets' raw spreads. XM often incorporates its fee into the spread, presenting a simpler, commission-free model on many account types.
Commissions
Commissions are a direct charge per trade, often applied on a per-lot basis.
* IC Markets: Charges a commission on its Raw Spread and cTrader accounts. For forex, this is typically around $3.50 per lot per side ($7.00 round turn) on the Raw Spread account and $3.00 per lot per side ($6.00 round turn) on the cTrader account. Their Standard account is commission-free but features wider spreads.
* XM: Offers predominantly commission-free trading on most of its account types (Micro, Standard, Ultra Low). This means the cost is built into the spread. They do have a Shares Account that charges commissions on stock CFDs.
Non-Trading Fees
Beyond spreads and commissions, it's important to consider other potential fees that can impact your overall trading expenses.
Deposit and Withdrawal Fees
* IC Markets: Generally does not charge deposit or withdrawal fees for most methods, though third-party payment processors might. For international bank transfers, there might be fees.
* XM: Offers commission-free deposits and withdrawals for most payment methods and amounts. However, local bank transfers under a certain threshold might incur charges from intermediary banks, not XM itself.
Inactivity Fees
* IC Markets: Does not typically charge inactivity fees.
* XM: Imposes an inactivity fee of $5 per month if an account is dormant for 90 days, provided there are funds in the account. If the balance is zero, no fee is charged.
Overnight (Swap) Fees
Both brokers charge or pay swap fees (also known as overnight or rollover fees) for positions held open overnight. These fees are determined by interest rate differentials between the two currencies in a pair and can be positive or negative. Both IC Markets and XM provide detailed information on their swap rates on their respective platforms and websites.
Comparison Table: IC Markets vs XM Fees
| Feature | IC Markets (Raw Spread Account) | XM (Standard Account) |
| :------------------------- | :---------------------------------- | :---------------------------------- |
| Spreads (EUR/USD) | Typical 0.0-0.1 pips (raw) | Typical 1.0-1.6 pips |
| Spreads (GBP/USD) | Typical 0.2-0.3 pips (raw) | Typical 1.8-2.2 pips |
| Spreads (XAU/USD) | Typical 10-15 cents (raw) | Typical 25-35 cents |
| Commission (Forex) | $3.50/lot/side ($7.00 round turn) | $0 (built into spread) |
| Minimum Deposit | $200 | $5 |
| Regulators | ASIC, CySEC, SCB, FSA (Seychelles) | CySEC, ASIC, FSC (Belize), DFSA |
| Platforms | MetaTrader 4, MetaTrader 5, cTrader | MetaTrader 4, MetaTrader 5 |
*Figures are typical at time of writing — always check the broker's official website for the most current information.*
Verdict by Trader Type
For High-Volume & Algorithmic Traders
IC Markets generally presents a more cost-effective solution for high-volume, scalping, or algorithmic traders. Its raw spreads combined with competitive commissions mean that the total transaction cost per trade can be lower, especially as trading volume increases. The cTrader platform, offered by IC Markets, is also a favourite among these trader types due to its advanced order management and API capabilities.
For Novice & Casual Traders
XM might be a more straightforward option for novice or casual traders due to its commission-free models where the cost is simply incorporated into the spread. This simplifies the fee structure and makes it easier to calculate potential trade costs. The lower minimum deposit and educational resources can also be attractive to those starting out.
For Traders Prioritising Execution
Both brokers offer robust execution. XM often boasts about its "no re-quotes, no rejections" policy and fast execution speeds, which can be a significant advantage. IC Markets, with its deep liquidity pools and ECN/STP model, also provides excellent execution, aiming for minimal slippage.
For UK Traders and Regulatory Considerations
Both brokers operate under various regulatory bodies. For UK traders, while neither IC Markets nor XM are directly FCA-regulated for retail clients, they often onboard UK residents through their offshore entities (e.g., FSA Seychelles for IC Markets Global, FSC Belize for XM Global). It's crucial to understand the regulatory protection afforded by these entities, which may differ from FCA protections. Always ensure you are comfortable with the regulatory framework under which you will be trading.
Conclusion
The choice between IC Markets and XM largely depends on your individual trading strategy, volume, and preference for fee structure. If you are a high-volume trader looking for the tightest possible raw spreads and are comfortable with commissions, IC Markets is often the stronger contender. If you prefer a simpler, commission-free model with slightly wider spreads and perhaps a lower entry point, XM could be more suitable. Remember, CFD trading carries significant risk and can result in the loss of your invested capital.
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