Spot Forex vs CFD Forex: Are we really trading Spot? | Forex Factory

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Spot Forex vs CFD Forex: Are we really trading Spot?

  • #1
  • First Post: Sep 11, 2019 12:36pm Sep 11, 2019 12:36pm
"A spot trade is the purchase or sale of a foreign currency or commodity for immediate delivery."

"CFD stands for Contract For Difference and is an agreement between you and your broker"
CFDs are a derivative product


Do we retail traders(speculators) trading Spot Forex? or just CFDs?

Does any Spot Forex Broker exists or all are CFD brokers?



Heartily Thanks for your answers.
  • #2
  • Sep 12, 2019 1:59am Sep 12, 2019 1:59am
Some brokers telling themselves as Spot broker
  • #3
  • Dec 13, 2019 12:55pm Dec 13, 2019 12:55pm
Quoting Himel
Some brokers telling themselves as Spot broker
Did find real spot brokers?
  • #4
  • Dec 13, 2019 1:11pm Dec 13, 2019 1:11pm
Quoting Himel
Do we retail traders(speculators) trading Spot Forex? or just CFDs?
Likely spot. Because of swap(s).
Return To Disorder
  • #5
  • Dec 13, 2019 3:43pm Dec 13, 2019 3:43pm
Quoting Himel
"A spot trade is the purchase or sale of a foreign currency or commodity for immediate delivery." "CFD stands for Contract For Difference and is an agreement between you and your broker" CFDs are a derivative product Do we retail traders(speculators) trading Spot Forex? or just CFDs? Does any Spot Forex Broker exists or all are CFD brokers? Heartily Thanks for your answers.

Cfds are cfds. Forex is forex. Two seperate asset class. There is no such thing as a forex cfd. Unless you are talking about "forex futures cfd" (which is highly unlikely unless you are explicitly trading futures) Cfds are reserved for products that are originally traded on exchanges
  • #6
  • Dec 13, 2019 3:56pm Dec 13, 2019 3:56pm
Quoting Bicarus
{quote} Cfds are cfds. Forex is forex. Two seperate asset class. There is no such thing as a forex cfd. Unless you are talking about "forex futures cfd" (which is highly unlikely unless you are explicitly trading futures) Cfds are reserved for products that are originally traded on exchanges
icmarkets they hay we forex but is cfd but lmx they said our forex is spot forex
  • #7
  • Dec 13, 2019 7:13pm Dec 13, 2019 7:13pm
Quoting yamin2000
{quote} icmarkets they hay we forex but is cfd but lmx they said our forex is spot forex
Cresco CFDs on FX / products
It's bad luck to be superstitious
  • #8
  • Dec 14, 2019 2:55am Dec 14, 2019 2:55am
Quoting Bicarus
{quote} Cfds are cfds. Forex is forex. Two seperate asset class. There is no such thing as a forex cfd. Unless you are talking about "forex futures cfd" (which is highly unlikely unless you are explicitly trading futures) Cfds are reserved for products that are originally traded on exchanges
Sorry Bicarus, but that is wrong.

Of course there are Forex CFDs, since CFDs are a derivative on an underlying asset class which of course can be Forex as well. A limitation on products only traded on exchanges is not existing. It is not that easy to distinguish between spot forex and Forex CFDs on the client side from a technical point of view. Especially as both share the same characteristics in many points. That is why I do not see any benefit to look for one of them explicitely.

When trading CFDs you are having a contract with one partner, while trading spot forex you can have multiple partners. That is a crucial distinguish point. That means having a real ECN implies spot forex in contrast to a trade with a market maker as a single partner (CFD).
  • #9
  • Dec 14, 2019 6:24am Dec 14, 2019 6:24am
Don't be silly. There is no spot market for retail traders for anything under 5-10 mil! Unless you are exchanging real cash at a bank or with some other party.

All retail Forex transactions are CFD's (different terms may be used for legal purposes for example in UK "spread betting" is a legal term to avoid taxes. In the US they call it spot because CFD's are illegal..... )but regardless of the terms, the technical operation is the same! Your broker takes the opposite side of every deal you make. Read carefully your contracts and terms of service. It's all there. Your broker is your counterparty. Your orders are pulled together with all other orders from other traders and only the net difference between buy and sell goes out to external liquidity providers. This is how all Forex brokers operate.
If you broker is claiming something else - he is lying. All this talk about DMA, ECN......It's all just marketing.
  • #10
  • Dec 14, 2019 6:33am Dec 14, 2019 6:33am
Quoting alphaomega
Don't be silly. There is no spot market for retail traders for anything under 5-10 mil! Unless you are exchanging real cash at a bank or with some other party. All retail Forex transactions are CFD's (different terms may be used for legal purposes for example in UK "spread betting" is a legal term to avoid taxes. In the US they call it spot because CFD's are illegal..... )but regardless of the terms, the technical operation is the same! Your broker takes the opposite side of every deal you make. Read carefully your contracts and terms of...
So what is reason for liquidity providers? Does it mean they only give the brokers the quote and no real exchange cash between HSBC and the brokers?
Lmax they we are spot
  • #11
  • Dec 14, 2019 6:37am Dec 14, 2019 6:37am
Quoting yamin2000
{quote} So what is reason for liquidity providers? Does it mean they only have the brokers the quote and no real exchange cash between HSBC and the brokers? Lmax they we are spot
Yes they give real time pricing.
But We (the traders) are the main liquidity providers for the brokers! The brokers use external liquidity providers (banks, and others) only to hedge their risk and to bring their books exposure close to zero.
  • #12
  • Last Post: Dec 14, 2019 8:13am Dec 14, 2019 8:13am
Quoting alphaomega
{quote} Yes they give real time pricing. But We (the traders) are the main liquidity providers for the brokers! The brokers use external liquidity providers (banks, and others) only to hedge their risk and to bring their books exposure close to zero.
all brokers do the same even brokers like lmax?
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