April 5, 2016

Question:Is iForex a STP/ECN or OTC FX broker?

iFOREX - What's now?

We are no longer promoting iFOREX. The information regarding to iFOREX on the website 'Hercules.Finance' maybe outdated. ref. iFOREX


iForex has mentioned in its terms and conditions that it may act as:

  • a broker, so STP/ECN model for traders
  • a counter party, or so called market maker for traders

Forex currency pairs and Precious Metals

Just like other brokers, iForex may provide the STP environment for Forex pairs and Precious metals tradings.

This is because the liquidity providers are able to act as counterparties for these financial instruments, thus iForex is able to send the orders directly to the market.

But as iForex may also act as a Market Maker, you trades may be just hedged by iForex itself.

This does not affect your tradings, but there will be a conflict of interest between iForex and traders if iForex acts as a Market Maker (Counterparty).

OTC for CFDs (commodities, oils, Indices, Stocks)

Some of the CFDs such as commodities, energies(oils/gas) and stocks(shares) are traded on OTC environment.

For these financial instruments, there is no real market(underlying market) where you can sell and make profits by the price difference.

It is OTC trading, and you are allowed to trade contract for Difference by iForex being the counterparty.

What is the merit of STP?

Some brokers are willing to provide the transaction statement that proves that your trades are sent to the market directly, but the broker is not hedging them.

iForex does not provide such services as it is not a complete STP broker.

If iForex offers OTC tradings for some traders and some instruments, but that doesn’t mean that there is any interference or manipulation on your trades.

But the only demerit of trading with OTC broker is  “conflict of interest”.

If a broker is able to provide the transaction statement that proves that the broker is STP model, than there is nothing to worry about though, STP&OTC broker can not provide that statement.

iForex to cancel the profits?

Some brokers are complete Market Maker model and they are known as cancelling the profits often.

This is because the OTC broker is making losses if traders are making profits, it is necessary action for them to not face a bankruptcy.

But iForex is STP & OTC model, so as long as the risk management team in iForex is taking care of the trades, there shouldn’t be the action of cancelling the profits.

Also there is no reviews mentioning the issue(as far as we can see).

Fixed Spread may restrict trading methods

As iForex offers fixed spread for all trading instruments, there may be some restrictions in regards to trading.

For example, you may be unable to trade during news time as receiving re-quotes if the market volatility is high.

iForex allows all kinds of trading methods, but you can not trade arbitrage as it is prohibited methods by other brokers too.

Also, fixed spread may gets wider if the market volatility is extreme.

Demo and real/live trading are different

You can try out the Demo FXnet Trader account for free at anytime though, please note that demo account may not be the same trading environment as the real ones.

As there is no market liquidity involved in the Demo account, there is no slippage and re-quotes.

This is a common difference also even in the MT4.

You can not take them as same conditions.

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