Forex Capital Markets, better known as FXCM, is a retail on-line foreign exchange broker based in New York. It provides its services through its own on-line trading platforms and through third party platforms such as MetaTrader 4.
FXCM allows retail and institutional clients to speculate on global foreign exchange markets in what is known as ‘margin forex trading’. It is one of the largest of the on-line margin based foreign exchange brokers. Outside the US, in addition to forex, it also provides trading in Contract for difference (CFDs) on major indices and commodities such as Gold and Crude Oil.
In Jan 2003 FXCM entered into a partnership with Refco group, which at that time was one of the largest US futures brokers. Refco took a 35% stake in FXCM and licensed the FXCM software for its own clients to use. However, following the collapse of Refco collapse in Oct 2005, FXCM became entrenched in the bankruptcy proceedings which carried on for a number of years.
In 2003, FXCM opened an office in London and became regulated by the UK Financial Services Authority.
In 2008, the US futures industry self-regulatory organization, the National Futures Association (NFA) obtained permission from the Commodity Futures Trading Commission (CFTC) to increase the minimum capital requirements for ‘Forex Dealer Members’, of which FXCM was one, to $20M in staged increments in response to failures of a few forex brokers. This had the effect of driving out a number of FXCM smaller competitors and allowed FXCM to increase its client base by acquiring business from some of these companies, many of whom either ceased all operations or simply moved out of the US.[2][3]
In 2008 FXCM continued its overseas expansion and opened offices in France and Australia.
In 2009 FXCM UK started offering a limited number of CFD to its non-US based clients in addition to its currency products.
In May 2010 FXCM acquired the UK CFD and spreadbetting provider ODL.[4] The deal gave them a much bigger presence in the UK and an existing CFD trading and financial spread betting client base concentrated in Europe.
On December 2, 2010, FXCM went public and began trading on the NYSE. The initial public offering price was 14.00 per share.[5]
As well as the main FXCM brand, it also owns the FX news and research web site http://www.dailyfx.com.
FXCM promotes a 'no dealing desk' service for its currency products where it takes prices from a number of major banks and allows clients to trade the best price at any given time. This is also known as a Direct Market Access (DMA) model which is in contrast to a market maker model more commonly used by forex brokers.
FXCM allows retail and institutional clients to speculate on global foreign exchange markets in what is known as ‘margin forex trading’. It is one of the largest of the on-line margin based foreign exchange brokers. Outside the US, in addition to forex, it also provides trading in Contract for difference (CFDs) on major indices and commodities such as Gold and Crude Oil.
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[edit] History
Forex Capital Markets was founded in 1999 in New York, and was one of the developers of on-line forex trading.In Jan 2003 FXCM entered into a partnership with Refco group, which at that time was one of the largest US futures brokers. Refco took a 35% stake in FXCM and licensed the FXCM software for its own clients to use. However, following the collapse of Refco collapse in Oct 2005, FXCM became entrenched in the bankruptcy proceedings which carried on for a number of years.
In 2003, FXCM opened an office in London and became regulated by the UK Financial Services Authority.
In 2008, the US futures industry self-regulatory organization, the National Futures Association (NFA) obtained permission from the Commodity Futures Trading Commission (CFTC) to increase the minimum capital requirements for ‘Forex Dealer Members’, of which FXCM was one, to $20M in staged increments in response to failures of a few forex brokers. This had the effect of driving out a number of FXCM smaller competitors and allowed FXCM to increase its client base by acquiring business from some of these companies, many of whom either ceased all operations or simply moved out of the US.[2][3]
In 2008 FXCM continued its overseas expansion and opened offices in France and Australia.
In 2009 FXCM UK started offering a limited number of CFD to its non-US based clients in addition to its currency products.
In May 2010 FXCM acquired the UK CFD and spreadbetting provider ODL.[4] The deal gave them a much bigger presence in the UK and an existing CFD trading and financial spread betting client base concentrated in Europe.
On December 2, 2010, FXCM went public and began trading on the NYSE. The initial public offering price was 14.00 per share.[5]
[edit] Operations
FXCM has its headquarters in New York and offices in Dallas, San Francisco, Hong Kong, London, Tokyo, Paris, Berlin, Sydney, Dubai, Milan and Athens.As well as the main FXCM brand, it also owns the FX news and research web site http://www.dailyfx.com.
[edit] Industry
FXCM's main business is allowing retail clients to speculate on forex markets with leverage. There is some criticism of the industry saying that few retail traders have the experience to make money trading forex. Drew Niv, chief executive of FXCM, has been quoted as saying that "If 15% of day traders are profitable I'd be surprised."[6]FXCM promotes a 'no dealing desk' service for its currency products where it takes prices from a number of major banks and allows clients to trade the best price at any given time. This is also known as a Direct Market Access (DMA) model which is in contrast to a market maker model more commonly used by forex brokers.
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