IC Markets: A Deep Dive into Raw Spreads and Execution
IC Markets has carved a niche for itself by focusing on providing raw spreads, particularly attractive to algorithmic traders and those employing high-frequency strategies. Their True ECN and Raw Spread accounts, available on MT5, boast interbank spreads starting from 0.0 pips on major currency pairs, albeit with a commission charged per lot. This model is often preferred by traders who prioritise minimal spread costs and fast execution.
Execution Speed and Technology
Recognising the importance of speed, IC Markets invests heavily in its trading infrastructure. Their servers are co-located with major liquidity providers in data centres, aiming to reduce latency and ensure rapid order execution. This can be a significant advantage for scalpers and day traders where milliseconds can impact profitability.
Regulatory Environment
For UK traders, IC Markets (through its global entities) maintains a robust regulatory framework, offering a degree of assurance regarding fund safety and operational transparency. While their primary regulation for non-EU/UK clients is ASIC, they also operate under other licenses to serve a global clientele.
XM: Diverse Account Types and Competitive Spreads
XM, on the other hand, presents a different value proposition. Known for its diverse account types, XM caters to a broader spectrum of traders, from beginners to experienced professionals. While they offer commission-free trading on most accounts, their spreads are generally wider than IC Markets' raw spreads but can still be highly competitive, especially on their XM Zero or Ultra Low accounts.
Micro and Standard Accounts
XM's Micro and Standard accounts are particularly popular for their accessibility, offering commission-free trading with varying lot sizes and minimum deposits. This makes them appealing to new traders or those wishing to trade with smaller capital.
XM Zero and Ultra Low Accounts
For traders seeking tighter spreads, XM offers the XM Zero Account (with a small commission) and the XM Ultra Low Account (commission-free, but with slightly wider spreads than XM Zero). These accounts are designed to compete with the raw spread offerings of brokers like IC Markets, providing a choice for different trading preferences.
Global Regulation and Client Protection
XM holds licenses from multiple reputable financial authorities worldwide, including the FCA in the UK. This multi-jurisdictional regulation reinforces its commitment to client protection and adherence to strict operational standards, which is a key consideration for UK-based traders.
IC Markets vs XM MT5 Spreads: A Detailed Comparison Table
To provide a clearer picture, here's a comparison of key features, focusing on their MT5 offerings:
| Feature | IC Markets (Typical, MT5) | XM (Typical, MT5) |
| :------------------- | :-------------------------------------------------------- | :------------------------------------------------------------ |
| Spreads EUR/USD | From 0.0 pips (Raw Spread Account) | From 0.6 pips (Ultra Low Account), From 0.0 pips (XM Zero) |
| Spreads GBP/USD | From 0.3 pips (Raw Spread Account) | From 0.9 pips (Ultra Low Account), From 0.1 pips (XM Zero) |
| Spreads XAU/USD | From 0.1 pips (Raw Spread Account, with commission) | From 1.5 pips (Ultra Low Account), From 0.2 pips (XM Zero) |
| Commission | £5.50 - £7.00 per standard lot round turn (Raw Spread) | £3.50 per standard lot round turn (XM Zero), Otherwise £0 |
| Min Deposit | $200 (approx. £160) | $5 (approx. £4) |
| Regulators | ASIC, CySEC, FSA (Seychelles) | FCA (UK), CySEC, ASIC, IFSC (Belize), DFSA, FSC |
| Platforms | MetaTrader 4, MetaTrader 5, cTrader | MetaTrader 4, MetaTrader 5 |
*Note: All figures are typical, at time of writing — check broker site for the most current information. Spreads are dynamic and can vary based on market conditions, account type, and liquidity providers.*
Verdict by Trader Type
For Scalpers and High-Frequency Traders
If your trading strategy involves frequent trades, high volume, and relies heavily on tight spreads to maximise profits, IC Markets generally holds an edge. Their raw spreads, particularly on the True ECN/Raw Spread accounts with MT5, are designed to minimise your entry and exit costs, even with the added commission. The emphasis on low latency execution also benefits these aggressive trading styles.
For Cost-Conscious Traders (Commission vs. Spread)
This depends on your preference. If you prefer transparent, all-inclusive spreads without separate commission charges, XM's Ultra Low or Standard accounts might be more appealing. However, if you're willing to pay a commission for potentially tighter raw spreads, IC Markets is a strong contender. XM's Zero account offers a good middle ground with tight spreads and a manageable commission.
For Beginners and Small Account Holders
XM often stands out for beginners due to its lower minimum deposit, micro accounts, and simpler commission structure (or lack thereof on many accounts). This allows new traders to start with smaller capital and manage their risk more effectively while gaining experience. The wide range of educational resources and robust customer support also makes XM a welcoming environment.
For Experienced and Diverse Traders
Both brokers cater well to experienced traders. IC Markets provides the advanced environment for those seeking raw market access. XM, with its varied account types, can appeal to those who prefer flexibility, possibly trading different strategies across various accounts. For UK traders prioritising strong local regulation, XM's FCA license is a significant advantage.
Featured Partner: Vantage
While IC Markets and XM are excellent choices, we also recommend exploring Vantage for competitive trading conditions and a robust platform. You can Open a Vantage account to discover their offerings.
Understanding CFD Risk
It is crucial for all traders to understand that Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money rapidly due to leverage. A significant percentage of retail investor accounts lose money when trading CFDs with various providers. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Never invest more than you can afford to lose.