Investment Offering

2011 Review of Forex Brokers

Foreign exchange rates are affected by myriad factors, ranging from central bank rates to fluctuations in commodities and stocks, and even global disasters. Sooner or later, traders are going to want to incorporate investment strategies that include different securities outside the typically traded major currency pairs and crosses. For the category of investment offering, we rated brokers on their range of markets based on the number of currency pairs they offer, as well as futures, stocks, and options trading availability. Other factors we considered were currency settlement services, or unique account management services that give the trader more options to secure their money or utilize exchange rates to hedge their other investment risks.

Since the investment goals between individual traders will vary greatly, it doesn’t make sense to rank each broker. Rather, we highlighted some of the key features of the brokerages that scored 5 stars in investment offering. Even among 5-star brokerages, there will be small factors that might make one of them a better fit for a particular trader’s investment strategies.

A handful of brokers listed on StockBrokers.com offer stock trading alongside forex, however, only two of them offer it in a seamless trading environment with a single account. thinkorswim and MB Trading offer a full range of investment offerings, including stocks, options, futures, and a large number of currency pairs. thinkorswim provides access to 117 different currency pairs, including many exotic currencies like the New Israeli Shekel and Korean Won. MB Trading has other features for investors who are serious about emerging automated trading technologies, offering free VPS hosting, FIX gateway, quote API, and even a development kit for traders looking to code their own systems directly to MB Trading’s server backbone.

Two other 5-star investment offering brokerages are PFG Best and CitiFX Pro. CitiFX Pro is owned and operated by Citi Bank, and while they don’t provide access to markets outside of forex, they provide the most currencies to their clients with more than 130 pairs. With Citi, your trading account funds will earn interest and CitiFX Pro is also the only retail brokerage that offers FDIC insurance on trading account funds. In addition to futures trading, PFG Best also offers unique currency investment solutions such as professionally managed trading accounts. These accounts are traded by professional money managers with the purpose of diversifying client assets to markets not correlated with equities. Then, for even the smallest investor, PFG offers their forex accumulation program. The FXAP allows traders and investors one time or monthly purchases of foreign currency to take advantage of dollar-cost-averaging. With real foreign currency, you can hedge your portfolio against currency fluctuations and accumulate interest.

Depending on your investment goals and trading strategies, there are brokerages that offer more than just the standard set of major currencies. If you want to take advantage of emerging markets, protect your weakening dollars, or hedge international business exposure, examine your options and find a broker that is offering something more. Remember, with rapid globalization, forex isn’t just for day traders anymore.