B-Book Forex Brokers – List
B-book brokers are forex brokers that act as the counterparty in forex transactions. In other words, they take the other side of a trade when an investor places an order. As such, B-Book brokers are the main source of liquidity in this execution model. The investor’s order is not routed through the interbank market.
B-Book brokers mainly make their money when the investor loses a trade. Consequently, many people view this as a significant disadvantage of using B-Book brokers. However, these brokers also have advantages that attract a multitude of traders. Today, we are going to be looking at some of the best B-Book brokers in the market. But before we do that, let’s look at some advantages and disadvantages of B-Book brokers.
Advantages of B-Book Forex Brokers
- B-book brokers almost guarantee execution as they act as liquidity providers. Therefore, even when liquidity is low in the market in general, traders can still trade.
- These brokers usually offer fixed spreads no matter the market conditions. This can be especially beneficial when there is volatility in the market.
- Order execution can be faster on these broker sites as the brokers are the liquidity providers.
Disadvantages of B-Book Forex brokers
- There is a conflict of interest as the brokers have an incentive when clients lose.
- There is Limited transparency because the client orders don’t reach the open market.
Difference Between B-Book brokers and A-Book Brokers
It is also important that we understand the difference between B-book brokers and A-Book brokers. As we mentioned, B-Book brokers are those who take the opposite side of a trade (also known as market makers). They provide the liquidity needed to fulfil an order. In contrast, A-Book brokers pass investors’ orders to liquidity providers who fill the other side of the trade. The broker does not act as the liquidity provider in this execution model.
With that, let’s take a look at a list of some of the best B-book brokers in the world.
eToro is a well-recognized forex and CFDs broker with over 30 million users. The broker is certainly one of the most recognized B Book brokers in the world today. With this trading site, traders gain access to more than 5,000 different market instruments. Particularly, investors can trade real stocks and cryptocurrencies alongside CFDs on forex, stocks, commodities, cryptocurrencies, ETFs, and indices.
The sole trading platform available for traders to use is the eToro in-house built platform. This platform comes with a lot of perks including the CopyTrader technology. This feature allows traders to copy the moves of top-performing traders on the platform. In terms of the spreads, eToro falls within industry standards. The spreads can go as low as 1.0 pips for major currency pairs.
Finally, on regulations, eToro operates under the supervision of a number of reputable regulators in the market. The company is subject to regulations and oversight by the FCA in the UK, the CySEC in Cyprus, and the ASIC in Australia. This is an impressive lineup, to say the least.
76% of retail investor accounts lose money when trading CFDs with this provider.
Exness operates as a market maker which means it is a B-Book broker. Notably, Exness is one of the most famous brokers in the market today. It is probably the biggest broker in trading volume. This broker site allows its traders to dip their foot in a variety of markets. Investors can trade CFDs on forex, commodities, cryptocurrencies, stocks, and indices.
We can see this diversity in the trading accounts offered by the broker. There are five main trading accounts to choose from. These include the standard account, the standard cent account, the pro account, the zero account, and the zero-spread account. On the standard account, the spreads start from as low as 0.3 pips with no commissions paid. The standard cent account offers similar spreads to traders.
On the other hand, the raw spread account features spreads from 0.0 pips with a fixed commission of $3.5 per side per lot. The zero account has 0.0 pip spreads on the top 30 instruments and a commission from $0.2 per side per lot upwards. Further, the pro account has ultra-low spreads from 0.1 pips with no commission required.
While regulations alone are not enough, they sure do help gain the trust of traders in the market. Exness has top-tier regulations by the FCA in the UK and the CySEC in Cyprus. On top of that, it is regulated by the FSCA in South Africa and the CMA in Kenya.
Remember that forex and CFDs available at Exness are leveraged products and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.
OANDA is a market maker broker that offers financial services since 1997. In the US, this is one of the top brokers offering over 68 different currency pairs to trade. Notably, this broker is a member of the NFA and a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission.
On this broker site, investors can trade over 68 different currency pairs and an assortment of cryptocurrencies traded against the US Dollar. The spreads for trading on this broker site are competitively low and industry-standard. Specifically, traders enjoy spreads as low as 1.4 pips for major currency pairs.
The trading platforms available for traders to use include MetaTrader 4, TradingView, and the Oanda trading platform. The education section on Oanda helps both new and old traders expand their knowledge as they trade with the broker. This and other features are what make Oanda Us one of the best brokers in the USA for beginners.
Risk warning: Trading margined products carries a high level of risk.
XM is another market maker with a global client base. Notably, this broker has a large number of users totalling over 5 million across the world. One of the reasons for this is its massive collection of market instruments. With this broker, investors can trade over 1,000 CFDs in forex, stocks, indices, commodities, and energies.
Better yet, the spreads for trading these instruments on the XM broker site are competitively low. They start from as low as 0.6 pips on the XM ultra-low account. On the standard account, they are from 1.0 pips upwards. The trading platforms available to use include MetaTrader 4, MetaTrader 5, and WebTrader. These offer traders fast order execution with 99.35% of orders executed in under 1 second.
On regulations, this broker has good standing. Specifically, it has authorization and supervision by the CySEC and the FCA, two of the best regulators in the market today.
AvaTrade is a Market Maker that has its own in-house dealing desk. The broker offers some of the fastest order execution by any B-Book broker. One of the reasons for this is because it offers a virtual private server. Using a VPS, clients can mitigate some factors that may slow down their trading process. Some of these factors include hardware failures, system errors, and power and internet outages.
Notably, AvaTrade offers more than 1,250 instruments on various platforms. These instruments include 60 currency pairs, major stock indices, cryptocurrencies, commodities, bonds, individual shares and ETFs. Better yet, it offers relatively low spreads starting from as low as 0.9 pips on the major currency pairs. The trading platforms available to use include MetaTrader 4, MetaTrader 5, and the in-house platform AvaTradeGO.
Now let’s look at the credibility of AvaTrade. Well, the broker has been in business since 2006 which gives it enough experience in the market. Most importantly, AvaTrade is under the regulation of the ASIC, the CySEC, and the Central Bank of Ireland, among others.
To close out our list, we will look at Saxo Bank which also uses a B-book model. This broker is a market maker that has been operating in the market since 1992. Particularly, this broker offers traders access to more than 71,000 different financial instruments. The various global markets that investors can trade include forex, stocks, ETFs, futures, listed options, and bonds.
For a trading platform, Saxo provides two in-house platforms including SaxoTradeGo and SaxoTraderPro. The broker boasts of providing some of the lowest spreads in the market starting from 0.6 pips for major currency pairs.
In terms of regulation, Saxo Bank is regulated by multiple institutions. These include the Financial Conduct Authority (FCA) in the UK, the Australian Securities and Investments Commission (ASIC) in Australia, and the Swiss Financial Market Supervisory Authority (FINMA) in Switzerland. Such strong regulations help win the trust of traders and investors at large.
B-Book brokers certainly have a place in the market. In fact, the majority of brokers in operation are B-Book brokers. These brokers mainly make their money when traders lose a trade. As such, they have a controversial reputation among traders. This is because this type of operation creates a conflict of interest and the broker is incentivized when traders lose. Nonetheless, these brokers have advantages that include fixed spreads and an assurance of execution.
In this review, we listed some brokers that we believe are the best in the market. Our criteria included four main aspects. These include the regulatory status, the availability of trading instruments, the trading platform available, and the spreads offered. As we understand each individual trader has their own needs, we encourage our readers to do their own research before investing.