When you search the web it is littered with adverts for all types of FX services. Forex is one of the most heavily traded markets in the world, but there are many different service providers offering many different products.
A while ago I wrote a piece on the Huffington Post about how FinTech is disrupting Foreign Exchange for the better.
But if you just need to know the difference between a Forex and currency broker. Here’s a quick breakdown of what the two different types of service provider offer:
What is a Forex Broker?
A Forex broker is for those that want to speculate or gamble on the FX market.
Forex brokers generally lets a customer buy and sell currency pairs on margin and acts more like a dealer between them and the customer. These fall under the category of spread betting, CFDs or spot FX.
There are thousands of Forex brokers offering this sort of account. There are also varying degrees of regulation and client protection. We show a list of some of the most established, well-capitalised brokers that have a good reputation and are also regulated by the FCA.
You can compare the top ten Forex brokers in the UK here. Or, if you are new to forex trading you can read our guide to the best forex brokers for beginners here.
What is a Currency Broker?
A currency broker converts money from one currency to another and provides international payment services.
Currency brokers are useful for individuals who make large or regular conversions and international payments. The exchange rates they offer a far better the banks and fees are normally worked into the rates.
For businesses they can help increase profits and reduce costs by effective managing foreign exchange exposure through forwards, hedging options and futures. Many also provide advisory services and rate forecasts.
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Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.