HERE IS A LIST OF FOREX BROKERS THAT WORK ON B-BOOK EXECUTION
Best B-Book Brokers List
An individual trader does not have direct access to the financial markets. Access to the financial market can only come through brokers. There are various types of brokers in the market a client can choose from, including B Book brokers and A-book brokers. B-book brokers are the kind of brokers that take the opposite side of an order. These brokers may offer a lot of benefits by taking the opposite side of their client's trade such as fast order execution. Further, B book broker set their spreads and because there is a lot of competition the spreads are often competitively low.
In this review, we will look at a list of some of the best B Book brokers in South Africa. We will evaluate their features to see what makes them stand out among the many options that exist.
What is a B-Book broker?
Before we jump into the list, it is important we understand what a B Book broker is and what differentiates them from A Book brokers. A B-book broker is a type of broker that takes the other side of a trader's trade. In simple terms, they provide the liquidity needed to complete a trade. They do this by buying large potions from liquidity providers, which they then sell to retail clients in small packages that can accommodate them. Thus, the broker creates a new market for retail traders that have no deep liquidity.
In contrast, A-Book brokers provide the bridge between traders and liquidity providers. As such, they do not provide the liquidity themselves. They merely act as the bridge between the traders and the liquidity providers who match the other side of orders.
B-Book Brokers Pros
There are several benefits to this kind of broker including the following:
- In-house order execution - The execution process of B-book is done in the broker dealing desk department. As such, these brokers can guarantee execution as they are the liquidity providers.
- Fixed spreads - B Book brokers usually offer fixed spreads even during volatile market conditions. This can be beneficial for traders who prefer to trade with fixed spreads.
- Fast execution - These brokers usually offer fast order execution as they do not have to pass the orders to liquidity providers.
B-Book Brokers Cons
Drawbacks of B-Book Brokers
- Conflict of interest - Since B Book brokers make money when traders lose a trade, this creates a conflict of interest.
- Limited transparency - Traders on B Book brokers do not have access to the underlying market. As such, they do not have access to the prices in the interbank exchange.
Our criteria for choosing the best B-Book Broker
For this review, we have selected reputable B Book brokers based on the following criteria:
- Regulations and licenses - We only featured brokers that have regulations and licenses from reputable organizations.
- Variety and availability of trading instruments - The availability of trading instruments allows traders to diversify their trading portfolio. As such, we only picked brokers with deep collections of market instruments.
- Trading fees - Brokers that offer low fees stand out because no trader wants to pay large sums of money when trading.
- Trading platform available - The brokers must offer world-class trading platforms for their traders to choose from.
XM.com
XM.com is one of the best B-Book brokers in the South African market. The broker has regulations from several reputable organizations in the market including the FSC in Belize, the FCA in the UK, and the ASIC in Australia. Such regulations help boost a broker's reputation.
Notably, the broker uses its dealing desk to match the trades of investors in a variety of markets. In total, traders have access to over 1,000 tradable instruments available on the broker site. The instruments include CFDs on forex, commodities, equity indices, stocks, shares, and energies. The trading instruments are available on a variety of trading platforms including MetaTrader 4, MetaTrader 5, and the XM Trading App. The platforms are easily customizable and suitable for both advanced and novice traders.
XM.com offers four main trading accounts with each having different spreads and commissions. these accounts include a micro account, a standard account, an XM Ultra account, and a shares account. The micro and the standard account feature spread from 1.0 pips for major currency pairs with no commission. On the other hand, the XM Ultra account features spreads from as low as 0.6 pips with no commission. The shares account is the only account that features commissions based on the asset and the size of the trade.
Libertex
Libertex also uses its dealing desk to match orders, which makes it a B Book broker. The broker was founded in 1997 and it has regulations and licenses from FSC in Mauritius and the SVGFSA, among others.. the broker has a low minimum deposit of $10 which is affordable for most South African traders.
Further, the broker offers a variety of global markets for its traders to choose from which include stocks, crypto, forex, metals, bonds, and ETFs. Libertex primarily charges commission fees which start from 0.007% and keeps the spreads ultra-low. Additionally, traders can invest the trading instruments on world-class trading platforms offered by the broker. The platform offered includes its in-house trading platforms Libertex, MetaTrader4, and MetaTrader 5.
AvaTrade
AvaTrade is yet another B-book broker in the South African market with a deep collection of market instruments. The broker offers various benefits to its clients including low latency. The low latency enables fast order executions when trading. Furthermore, clients can invest in over 1,250 tradable assets and spread their risk of investment. The markets available include forex, metals, commodities, indices, bonds, ETFs, and equities. AvaTrade has some of the tightest spreads in the market that start from as low as 0.9 pips for major currency pairs with no commission required.
Notably, AvaTrade has licenses and regulations by the FSCA in South Africa. The broker also has other regulations from reputable organizations including CySEC in Cyprus, the Central Bank of Ireland, and ASIC in Australia. The regulations ensure clients have fair trading conditions.
Lastly, traders can access a variety of trading platforms which include MT4, MT5, AvaTradeGO, and Web Trader. The variety enables clients to choose the best platform that better suits their needs. The various platforms feature advanced charting, powerful trading tools, and easy-to-use interfaces for all types of traders.
Saxo Bank
Trading Forex and CFDs entail risk.
Your capital is at risk.
Saxo Bank is the last B Book broker in the South African market we will feature here. South African traders have access to over 8,800 instruments that range from forex, futures, crypto, commodities, bonds, and ETFs. With this, traders can diversify their trading portfolio on the Saxo Bank trading site. What's more, the broker offers some of the tightest spreads in the market. The spread can start from as low as 0.6 pips for major currency pairs on their main account types which include classic account, platinum account, and VIP account.
Further, the broker has regulations from reputable organizations around the world. These include the ASIC in Australia, the FCA in the UK, and the FINMA in Switzerland. Saxo Bank upholds a code of conduct to combat financial crime and claims that they go beyond complying with the letter of the law.
Lastly, South African traders can access various market standard trading platforms on Saxo Bank. These include two in-house trading platforms, SaxoTraderGO and SaxoTraderPro. Additionally, traders can use Saxo API which is fast, flexible, and allows integration with other trading software.
City Index
City Index acts as a market marker for all the market products it offers totalling over 13,500 different instruments. The broker strives to offer the best possible price with minimal latency. The broker gives traders access to global market products such as indices, shares, commodities, cryptocurrencies, forex, ETFs, bonds, and metals. The trading instruments are available on market standard trading platforms the broker offers. The platforms include TradingView, MetaTrader 4, Web Trader, and mobile apps.
Further, the broker offers two main accounts which include the standard and MT4 accounts. The standard account is accessible via the company’s web-based platform and TradingView. It has a low minimum spread of 0.8 pips for major currency pairs with no commission. In comparison, the MT4 account has spreads from as low as 0.5 pips with no commissions except on the shares market. As the name suggests, the MT4 account is accessible via MetaTrader 4.
Positively, City Index is part of the StoneX Group which is regulated by well-known regulators around the world. These include the FCA in the UK, the CIRO in Canada, and the ASIC in Australia. Such regulations suggest the broker follows strict financial laws in the market.
South African traders can access a variety of B Book brokers in the market. With features like fixed spreads, fast execution, and lower entry barriers it is no surprise why traders may prefer this type of broker. In this article, we have listed some of the best B Book brokers in the South African market. The brokers on this list have some of the lowest spreads, a variety of trading instruments, world-class trading platforms, and are regulated by reputable organizations. However, this is not the full list of B Book brokers operating in South Africa. As such, we call upon traders to do a lot of research and choose the broker that best suits their needs.