Compare Forex CFD Brokers 2024 : eToro vs XM vs OctaFX

Which brokers offer social/copy trading?

The following brokers offer social/copy trading: eToro, XM and OctaFX.

Best Brokers for Social/Copy Trading

Which brokers offer cryptocurrency (CFD) trading?

The following brokers offer cryptocurrency (CFD) trading: eToro, XM and OctaFX.

Best Brokers for Cryptocurrency (CFD)

Which brokers allow scalping?

Both XM and OctaFX allow scalping on their platform.

Best Brokers for Scalping

Which brokers allow hedging?

The following brokers allow hedging: eToro, XM and OctaFX.

Best Brokers for Hedging

Which brokers provide Negative Balance Protection?

Both eToro and XM provide Negative Balance Protection on their platform.

Best Brokers with Negative Balance Protection

Which brokers offer a Demo Account?

Only XM offers a Demo Account.

Best Brokers Offering Demo Accounts

Which brokers offer an Islamic Account?

Both XM and OctaFX offer an Islamic Account on their platform.

Best Brokers Supporting Islamic Accounts

What does it matter which licenses a broker has?

Licenses allow brokers like eToro, XM and OctaFX to legally provide services in those countries or regions. By having permits from regulators globally, the broker is authorized to conduct business and operate globally.

These licenses and regulations are good for consumers because they hold these companies to high standards.

For example, licenses from:

• ASIC in Australia,
• FCA in the United Kingdom,
• CFTC in the United States,
• CySEC in Cyprus

Require that eToro, XM and OctaFX follow rules around:

• Keeping customer money safe
  Regulators make sure brokers keep client money separate from their own money. This stops brokers from spending customer money.
• Providing clear fees and charges
  Regulators check that brokers show all fees to customers upfront. This helps customers understand and compare costs.
• Resolving complaints fairly
  Regulators check brokers are dealing with customer complaints fairly. Brokers must have policies to fix complaints.
• Guarding against fraud
  Regulators make rules so brokers check customer identities. This helps stop criminal activity. Regulators can punish cheating brokers.
• Advertising honestly
  Regulators tell brokers what they can and can't say in ads. This stops brokers making false promises. Regulators can fine brokers who break ad rules.

Which brokers are authorised by ASIC, FCA, CFTC and CFTC?

AU's ASIC, UK's FCA and America's CFTC are considered global “gold standards” in rigorous consumer protection laws and enforcement policies.

• ASIC (AU) Authorised - Both eToro and XM are licensed by the ASIC (AU).
• FCA (UK) Authorised - Both eToro and XM are licensed by the FCA (UK).
• CFTC (US) Authorised - Only XM is licensed by the CFTC (US).

CySEC in Cyprus follows the strict rules set by the European Union called MiFID. These MiFID rules were created to strongly protect investors.

• CySEC (CY) Authorised - The following brokers are licensed by the CySEC (CY): eToro, XM and OctaFX.

Which brokers are not registered with ASIC, FCA or CFTC?

• Not registered with CFTC (US) - Both eToro and OctaFX are licensed by the CFTC (US).

  This doesn't necessarily have to be a red flag as some forex brokers make the choice to only have customers who live outside of the United States. They do not accept traders who live inside the U.S. The CFTC is the agency in the U.S. that oversees brokers for U.S. residents. Since these brokers don't have any U.S. customers, the rules and registration enforced by the CFTC does not apply to those brokers. The brokers are still responsible for following the local rules where their international customers live. But they do not have to register specifically with the U.S. agency (CFTC) because they do not serve traders who reside in the United States.

• Not registered with ASIC (AU) - Only OctaFX is not licensed by the ASIC (AU).

  Again, even though ASIC is known globally as having the strictest and most feared regulation of forex brokers, this doesn't always have to ring alarms. However, some brokers deliberately avoid Australia because ASIC aggressively examines brokers in detail and has very high standards of acceptable conduct. If ASIC finds brokers are badly mistreating customers or ignoring the strict rules, ASIC will punish them severely without waiting by issuing massive fines or shutting them down. Forex brokers know not to take ASIC rules lightly because ASIC is watching them closely and will come down hard on them if customers are harmed by their poor behavior.

• Not registered with FCA (GB) - Only OctaFX is not licensed by the FCA (GB).