Forex.com told us in a release this week that it has launched a new pricing structure that reduces spreads by up to 50% on previous minimums. Apparently customers can trade spreads as low as 0.9 pips on some currency pairs including EUR/USD, GBP/USD and USD/JPY.
This new pricing system has been designed to “offer maximum transparency to customers”.
No big whoop. Looks like Forex.com is playing catch up when others like Oanda and FXCM have had those spreads for some time.
The real issue is how much brokerage are they going slap on top? What is the liquidity like, and do all account sizes see those prices? For the sake of transparency, we asked Forex.com to clear that up for us.
“We do not charge a brokerage fee, rather a customer’s only transaction cost is the dealing spread,” says a spokesman.
Now it seems to me, and I’m pretty new to this game, that brokerage fees would probably be the more transparent option because in the back of my mind, I know that on every trade I do, I’m paying X amount of dollars on top. Whereas with the commission wrapped up in the spread I don’t know what the transaction cost is.