XM Fees and Spreads Review South Africa – Revealed ( 2020 )

 

A review of XM
 

XM Fees and Spreads

 

According to research in South Africa, XM’s commissions start from $0 with variable spreads from as low as 1 pip.

XM has a low and incredibly competitive spread when compared to what other brokers offer by offering a spread list from as low as 1 pip along with zero commissions charged on trades on most accounts, except the Shares Account.

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XM trading fees are according to the type of account that the trader chooses and the options along with the spread list, leverage, minimum deposit required, and commissions are as follows:

  • Micro Account – minimum deposit of $5, leverage from 1:1 to 1:888, spreads from as low as 1 pip and zero commissions.
  • Standard Account – minimum deposit of $5, leverage from 1:1 to 1:888, spreads from as low as 1 pip and zero commissions.
  • XM Ultra Low Account – minimum deposit of $50, leverage from 1:1 to 1:888, spreads from 0.6 pips and zero commissions.
  • Shares Account – minimum deposit of $10,000, no leverage and commissions charges as per the underlying exchanged from $1 up to $9.

 

The spread is the difference between the bid and ask price of a financial instrument and brokers have various ways in which this is offered; it can either be fixed, variable, or floating.

Fixed spreads are not subjected to factors such as market conditions and may stay the same, depending on the broker’s own conditions whereas other spreads may change, either increasing or decreasing, although, the lowest possible spreads are 0.0 pips.

Different brokers offer different spreads as part of their trading conditions and spreads can be classified either as tight, where they are lower, or wide, where the pips are more. For instance, 0.0 pips is tight whereas 4.0 pips is wider.

Traders will need to consult the spread list of the broker prior to opening an account to verify this as it forms part of trading fees through which the broker makes its commissions for facilitating trading activities.

The minimum deposit that XM requires to open an account is $5 which is substantially lower than what brokers who offer similar trading conditions require.

This is merely the minimum required to open an account, and traders will have to verify the margin requirements on certain trading options to ensure that they fund their account with enough to cover these margins, despite having the option of using leverage. XM offers real or demo accounts.

Leveraged and margined trading can be an advantage for traders with smaller initial deposits, but traders need to ensure that they are adequately familiarized with both the rewards and the risks involved with trading using these tools and features.

In addition to using this, traders need to beware of the risk of losing amounts that may exceed their initial deposits and it is imperative to ensure that the broker offers negative balance protection.

The purpose of this is to minimize, or eliminate, the chance of incurring losses that can put the trading account in a substantial negative, making the trader liable to cover the costs payable to the broker to bring their account back up to a zero.

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Other Fees

 

Traders should note that certain financial instruments can only be traded during a certain time of the day, especially when considering different time zones, and additional fees may be charged should they hold these positions after they have closed.

Traders should always note that Overnight fees, otherwise known as swap fees or rollover fees, may be charged for positions held open for longer than a day.

XM offers the option of an Islamic account to traders who are of Muslim faith and who operate under the Sharia Law.

The purpose of an Islamic Option on accounts to Muslim traders is to ensure that they are not subjected to interest rates, of which overnight fees is only one, which is prohibited by the Sharia law as it is seen as exploitative or wasteful.

In ensuring that there is a swap free, or Islamic account, option, brokers such as XM more adequately cater for traders, such as Muslim Traders, amidst others who may be restricted from trading due to their religion or other beliefs.

XM does not offer traders with spread betting and therefore spread betting fees are not applicable to this broker. Very few ECN brokers, if any at all, offer spread betting as ECN brokers work according to a different trading facility.

There are, however, brokers who are ECN, STP, NDD, or Market Makers, or a combination of all, which allows for the facilitation of various traders in providing a variety of trading models according to which they operate, which is advantageous.

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Broker Fees

 

XM does not charge any deposit fees or withdrawal fees internally, but traders will need to verify additional fees on transactions with their payment provider.

There is no indication of whether XM charges any additional broker fees such as inactivity fees or fees pertaining to account maintenance and management, according to research in South Africa. View XM’s sign up bonus.

 

Pros and Cons

 

PROS CONS
1.      Tight and competitive spreads 1.      None noted
2.      Low minimum initial deposit amount
3.      Zero commissions with most accounting options
4.      Deposit fees and withdrawal fees are not charged

 

 

Frequently Asked Questions

 

How many instruments can I trade with XM?

Forex  / Stock CFDs / Commodities / Equity Indices / Precious Metals / Energies, and / Shares

Which platforms are supported by XM?

XM provides the following popular trading platforms: MetaTrader 4, and MetaTrader 5

Does XM offer leverage?

Yes, traders have access to leverage from 1:100 to 1:888 depending on the account.

What spreads can I expect with XM?

Spreads from as little as 0.0.

Does XM charge commission?

Yes, Commissions are charged when using the Shares Account depending on the underlying asset, ranging from $1 up to $9.

 

 

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