In late March 2012 started a new rating - Best Institutionary Broker 2012. At this point, there are 22 brokers. What are institutional brokers? What is the difference between them and ordinary dealing centers?
Institutional Brokers
According to Eugene Olkhovsky, ’s leading expert in financial markets (Canada), it is not so difficult to tell an institutional broker from an ordinary one. Institutional brokers have some major competitive edges over their rivals, which suggest a higher degree of reliability and a wider range of services:
· Institutional brokers offer a wide range of assets, including currencies, stocks, indexes, bonds, commodity and currency futures, options etc.
· A trader can trade various markets form a single account
· Low spreads and commissions
· Almost instant execution
· Full interbank liquidity
· Individual online consultations for VIP clients
· Premium licenses
Initially, institutional brokers were created to service institutional traders and investors – banks, dealing centers and ordinary brokers as well as hedge funds, corporations and other financial institutions that need high-quality service, low commissions and a wide variety of assets and tools as they trade very big lots.
Institutional brokers proved reliable over many years of excellent work in financial markets. Moreover, their activities are controlled by the world’s major financial regulators. This reduces any chances of manipulation to a minimum.
Therefore, institutional brokers are more reliable and offer more beneficial trading conditions than ordinary brokers and dealing centers. The only drawback is that a client of an institutional broker must have substantial trading capital – $20-50K.
Most Western traders prefer institutional brokers to ordinary dealing centers mostly due to their reliability.
Obviously, a lot of brokers would like to become institutional. However, even Forex Club (Russia’s biggest Forex broker) is planning to do that in 4-5 years.
Why do various institutional brokers have different startup levels in ’s rating?
The thing is that the initial standing in the “World’s Best Institutional Broker 2012” rating depends on a broker’s standing in ’s general rating of Forex brokers (which is based on 20 independent criteria, including licenses, spreads, international awards, client feedback etc.). The difference is 100-200 rating points. However, expects dozens of thousand traders to participate in the voting. That is why, against this background, the initial difference looks insignificant. At the same time, some voters may wonder why, for example, FOREX.com has a higher starting position than Dukascopy Bank SA , Saxo Bank is higher than FxPro Group, HY Capital Markets outpaces ACM (Swissquote Bank) or FXDD.
So, let’s look at the initial rating in advance of the voting:
As we can see, the Top 6 standings are occupied by the representatives of the ultimate league of ’s rating of FX brokers : FOREX.com, FXCM, Dukascopy Bank SA, Alpari, Saxo Bank and HY Capital Markets. Then follow other representatives of the ultimate league: MB Trading, FXDD, CMS Forex, Interactive Brokers, FXall, CitiFX Pro, GCI Financial Ltd, Hotspot FX, Varengold Bank FX, ECN BROKER, ATC BROKERS, IG Markets (IG Group Holdings) Marketindex (RBS Group) and ACM (Swissquote Bank). The reason is that they have no or insufficient client feedback to earn the required 350 rating points.
The 3 institutional brokers that will receive the lowest amount of rating points will automatically enter the “Anti-Brand Broker 2012” rating initiated by .
Eugene Olkhovsky assumes that the rating will give any trader an opportunity to compare the brokers and to choose the most suitable one! Therefore, everyone is welcome to participate in the open voting and to get answers to his/her questions after registering on ’s forum for traders and investors.
Market Leader and would appreciate if you could participate in a survey. Please, visit the Academy’s forum for traders and investors and answer the following question:
Do you prefer institutional brokers to other broking companies?
