E*Trade takes the IB route to FX explained by professional Forex trading experts the “E*Trade takes the IB route to FX” FX trading team.
E*Trade takes the IB route to FX
Online stockbroker E*Trade announced today that they have joined a number of their online brokerage brethren in getting into the retail FX business, with the launch of E*Trade FX as a White Label of FXCM’s Trade Station platform.
However, as pointed out by our friends at CMAP on their corporate blog, E*Trade FX is launching as an Introducing Broker (“IB”) rather than a full Retail Foreign Exchange Dealer (“RFED”). What that means is that FXCM, and not E*Trade, will hold all the FX accounts and corresponding client funds, and FXCM will act as the counterparty to FX trades with clients, not E*Trade.
CMAP points out that as an IB, E*Trade’s NFA/CFTC requirements are far less than had they chosen to become an RFED and directly take client funds and trades. This is a similar route as taken by competitor Zecco (IB of Gain Capital), but different that the full (and more expensive) RFED route taken by other hi-profile White Labels such as Deutsche Bank’s dbFX, which was shut down last year. Some of E*Trade’s other US online trading competitors have launched their own (RFED) offerings, such as TradeStation (formerly a White Label of Gain Capital) and optionsXpress. Only TradeStation has made much of a dent so far in the ever-crowding US online Forex market, with now about $70 million in clients’ FX deposits.
E*Trade takes the IB route to FX Conclusion
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