And then there were thirteen… Actually twelve as CMS Forex is phasing out. Ikon GM is out (since October 2010, Francesc thanks for the tip) and Tradestation formed a new entity – Tradestation Forex which received an RFED status in January 2011. IG Markets is out as well.
Tradestation, according to its own report, is pretty small in terms of forex accounts and while liquidating mostly through Gain Capital it brought only about $1.8 million in forex commission in 2010. They expect this to change late 2011 as they’ll be pushing their new forex offering aggressively. It’s hard for me currently to see TradeStation Forex conquering the US retail forex market as the market is already dominated by existing players and TradeStation will probably not offer MT4 at first but it is always nice seeing a more institutional ‘old-fashioned’ type of a player entering this market. Yet another sign of maturity.
These are the US Forex brokers left (by RFED status with CFTC):
- ADVANCED MARKETS LLC
- ALPARI (US) LLC
- CAPITAL MARKET SERVICES LLC (phasing out)
- FOREX CAPITAL MARKETS LLC
- FOREX CLUB LLC
- FX SOLUTIONS LLC
- FXDIRECTDEALER LLC
- GAIN CAPITAL GROUP LLC
- GLOBAL FUTURES & FOREX LTD
- INTERBANK FX LLC
- MB TRADING FUTURES INC
- OANDA CORPORATION
- TRADESTATION FOREX INC
Of course there’s also the non-RFED brokers such as CitiFX Pro and dbFX as well as MF Global and thinkorswim. PFG, which primarily deals with futures, is not an RFED by definition but still offers forex.
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Reading from the most recent TradeStation financial report:
TradeStation Forex, Inc., a Florida corporation (“TradeStation Forex”), was recently formed to assume, own and conduct all of our forex brokerage business (such business has historically been owned and conducted by TradeStation Securities using an established forex dealer firm to clear its forex business). In January 2011, TradeStation Forex was registered with the Commodity Futures Trading Commission (CFTC) as a Retail Foreign Exchange Dealer (RFED) and approved by the National Futures Association (NFA) as a forex dealer member (FDM). Later in 2011, TradeStation Forex expects to receive a transfer of all of TradeStation Securities’ forex accounts and commence operations as a forex dealer (at which time TradeStation Securities will cease its forex business). TradeStation Forex’s business model will be what is commonly referred to as “agency execution” or the “agency model”.
We believe that our new forex offering through TradeStation Forex will be superior to what we previously provided in many ways. We will now be brokering as principal to our clients (also referred to as “agency execution” or the “agency model”), no longer introducing accounts to a third-party forex dealer, and use systems and relationships designed to offer narrower, more-transparent price spreads. We will no longer charge a monthly service fee to forex customers to gain access to our trading platform, and will charge no fees for forex data and no commissions. Our profit on each trade will be limited to a reasonable mark-up of the spread that we believe will not affect the competitiveness of the spread in the marketplace. We have also built into TradeStation a brand new screen interface for customers to place orders in an intuitive and familiar way, which is seamlessly integrated with the analytics power of our platform. We also will include, at no extra charge, the functionality of our premium RadarScreen product so that our customers can analyze multiple foreign currency pairs simultaneously on one screen. Also, to make the offering more attractive to the large and growing retail forex market outside of the United States, accounts can be funded and monitored in one of several different foreign currencies. We believe this combination of features and pricing produces a forex offering that is superior not only to what we previously offered, but also superior to what is generally available in the market today for retail forex traders.
Until our new forex offering is launched, our forex deal services are provided through an arrangement with GAIN Capital Group, Inc. Forex customers can design, test, optimize and automate their forex strategies, including the placement of their orders, using TradeStation , then, when a deal order is placed, GAIN Capital’s electronic dealer system processes the order and GAIN Capital acts as counterparty/principal with respect to the execution and clearing of each forex deal. This relationship is expected to terminate later in 2011 in connection with TradeStation Forex’s anticipated launch of our new forex offering.