IC Markets Spreads And Fees Review

Summary Of IC Markets Fees + Spreads

We understand how difficult it can be to understand all the fees when you buy forex or CFDs with a broker. To make things easier for you, we have broken down the fees and transaction costs you are likely to encounter with IC Markets and explained what these fees entail.

When you buy forex, shares CFD, bonds, indices etc. you will encounter 3 types of costs. These are

• Trading/brokerage fees –  This is the fee the IC Markets charge you to execute your trade. With IC Markets this will usually be in the form of spreads or commission.
  • Commission: This is a charge you will pay for each side of the lots you trade. Use of commission means spreads are narrower as the broker does not interfere with the spread
  • Spreads – This is the difference between the buy and ask price of a currency pair. You express the spread as a pip  (percentage in point) or a pipette which is 1/10 of a pip. Spreads are 1 pip wider for non-commission accounts.
• Non-trading costs – These are cost operational costs you for having an account with the broker. Non-trading costs includes funding fees and inactivity fees.
• Other / Ancillary costs – IC Markets allow you to use other optional tools to enhance your trading experience such as social trading tools (i.e. ZuluTrader or MyFxBook Automate). These will sometimes have a cost involved.

IC Market Forex Fees

IC Markets Trading Fees

You will find IC Markets charge lower fees than traditional brokers. IC Markets uses ECN (electronic communication) and STP (straight-through processing) style trading. ”ECN’ and/or ‘STP’ style trading saves you on costs as no dealing desk is involved in the trading process.

IC Markets ensure pricing integrity by using over 25 liquidity providers. Use of liquidity pool  ensures you are paying rates that are a true reflection of market prices.

The brokerage fees you pay will be determined by the type of IC Markets account you are using. These accounts are:

• Standard account -This account offers similar spreads to the RAW account but adds 1 pip to the final spread however does not commission.
• RAW spreads account – This account uses ECN/STP style trading. Spreads are low because they are set by the liquidity providers. IC Markets do not interfere with the final spreads but instead, charge a commission. This commission is AUD$3.5 per standard lot (100,000 units) each way (i.e. AUD$7).  To use this account you must be using MetaTrader platform
• Raw spread account (cTrader) – Like the RAW spreads account, this account uses ECN-STP style trading for spreads but is for traders using the cTrader platform. Commission, however, is different being USD$3 per USD$100,000 traded.

Other expenses

• Rollover Rate: Also known as overnight swap or finance fee, this is the interest charge for keeping your position open after closing. The rate is determined by the interest rate differential between the currency pair kept open.  If you hold your position on a Wednesday night, the charge will be triple usual rate. Swap rate calculation is Lots * swap points * point size

Typical IC Markets spreads for forex

Standard Account

The IC Markets standard account is a great account for beginner traders as there are no commissions. With the Standard account, you will get ECN style spreads (which IC Markets call RAW spreads) with a flat 1 pip added to the spread.

Trading cost for Standard Account

IC Market add 1 pip to the spread. They do this by subtracting -0.5 pips from the bid and adding 0.5 pips to the Ask price.

As an example, if the spread for an ECN style account is 0.80000/0.80001 then the spread will be revised to become 0.79995/0.80006. This gives a spread of 0.80006 – 0.79995 = 0.00011 pipettes or 1.1 pips.

To calculate you spread cost apply the following formula

Total cost = (Spread) x (Pip Cost) x (Number of Lots Traded)

To trade in your base currency then apply the following pip cost:

• Micro-lots (1000 lots base currency) then your pip cost will be $0.10c
• Mini-lots (10,000 lots base currency) then your pip cost will be $1
• Standard-lots (lots base currency) then your pip will be $10

Should your account not be the base currency then you will need to convert the currency, then the formula is

Pip value in quote currency (ask) =  (1 pip/exchange rate) x lot size (the bid quote or base currency) or

Pip value per lot (1 pip) which is 0.0001  / exchange rare or current price of the pair x lot size (in base currency)

(not JPY is calculated differently)

IC Markets Standard account calculation example:

RAW Spreads Account

This account is likely to be for you if you want the lowest possible spreads. By using Electonic Communication Networks style conditions for trading, spreads can be kept very narrow.

Trading cost for RAW spreads account:

The Raw spreads account charges a commission rather than a wider spread. Your commission cost for RAW spreads will be the following

• Standard lot (100,000 units) = USD$3.50/USD$7 round turn
• Mini-lot (10,000 units) = USD$0.35 / USD$0.70 round turn
• Micro-lot (1000 units) = USD$0.035 / USD$0.070 round turn

Calculating the commission cost:

If you open (called go ‘long’) your 5 standard lots (i.e. 500,000 units) then the commission will be USD$17.50 (5 x USD$3.50) side trip.

When you close your position (go ‘short’) for the 5 standard lots your commission will also be USD$17.50.

This means you commission will total USD$35.

Trading costs with Raw Spreads account (cTrader)

cTrader Raw spreads account is the same as IC Markets Raw spreads account except you are using the cTrader platform rather than the MetaTrader platform. The commission is based on units sold rather than lots.

Comparing Spreads with other brokers

IC Markets fees for RAW account which uses ECN Style trading with Pepperstone which uses similar trading policies you can see the fees are very similar. ECN Style spreads offer some of the lowest spreads on the market. This can be demonstrated by the fact IC Markets spreads are superior to Plus500 and PLUS500 spreads.

While it is true IC Market RAW spreads have the cost of commission and IG Markets and Plus500 do not, the ECN style spreads will mean lower cost.

Total cost = (Spread) x (Pip Cost) x (Number of Lots Traded).

IC Markets RAW spreads account cost = EUR/USD 0.1 (spread) x $10 x 1 lot = $1 + commission of $3.50 (Sideways) results in a cost of $4.

IG / Plus500 cost = EUR/USD 0.6 (spread) x $10 (pip cost) x 1 lot = $6

If your base currency is EUR then you will need to convert the pip cost to EUR.

cTrader Commission Rates

IC Markets cTrader commission =  USD$3 per USD$100,000 bought and USD$3 per USD$100,000 sold.

To calculate the USD commission, you need to convert the base currency.

If you are trading with AUD/USD then the following calculation will apply:

Opening Price: AUD$100,000 x 1.300 = USD$100,000 x (3/100,000). This results in a commission of USD$3.90 for each lot.

Closing Price: $100,000 x 1.310 = USD$100,000 x (3/100,000) = This results in a commission of USD$3.93 for each lot

Total commission on trade = USD$3.90 + USD$3.83 = USD$7.83

If your base currency is AUD then you will need to convert this to AUD.

Calculating the finance charge/overnight holding fee

All brokers charge an overnight holding fee which IC Markets apply at 00:00 MetaTrader server time each night.

Calculating the finance charge/overnight holding fee for forex with IC Markets:

• Swap Charge = Number of Lots x Swap Rate (Long or Short) x Point Size x Number of Days (where the overnight charge for Wednesday is triple).
• Point size is contract size x minimum price fluctuation which is 0.00001.

IC Markets will provide the long and short swap points in their trading platforms for all the currency pairs they offer.  Depending on the interest rates you will either incur a rolling fee or receive interest credit for the fee.

IC Markets Fees conclusion

The main takeaways for fees with IC Markets are the following:

1. The standard account adds 1 pip to the spread.  In our example, we traded 5 standard lots which have a round-turn cost of AUD$110
2. RAW spreads account adds a commission fee of $AUD3.50 sideways / AUD$7 round turn for each standard lot you trade (100,000 units). The spread is not widened.
3. cTrader charges a commission of USD$3 for each $100,000 traded.  This makes it hard to compare with MetaTrader platform which uses a fixed amount for each lot.

IC Market Shares CFD Fees

With IC Markets Shares CFD you can trade some of the largest and popular companies in the world through the Australian and New York stock exchanges. There are some 100+ stocks available across ASX, NSADAQ and NYSE. One of the key features with IC Markets is that you can earn dividends for the stock CFDs you own.

To trade shares CFD, you must be using the MetaTrader 5 platform.

Fees for Shares CFD

• Trading Fees:
  • Brokerage Fees: This will vary by the market you trade with
    • ASX: You will incur a charge of %0.10 for each share you trade.
    • NASDAQ and NYSE: You will incur a charge of 0.02 USD for each share you trade.
  • Finance Charge: To calculate the overnight fee the following formula will apply. (Number of shares) x (market closing price) x (interest rate) / 360. Fees are triple on Fridays.
• Non Trading Fees:
  • Currency conversion: When you close your position with a currency that is not the base currency of your account there will be a cost to convert the currency to the base currency you use for your account which may differ to the spot rate.
  • Stock borrow fee: IC Markets in some circumstances may pass on stock loan fee if IC Markets receive this charge from their hedge counterparty charges. IC Market will notify you of this fee if it occurs.

Calculating your Shares CFD fees to open and close on the ASX.

IF you want to buy 1000 ANZ Bank shares and are quoted AUD$28.50 / AUD$28.60 (Buy/Ask) on the exchange.

Cost to open your position =  AUD$28.60 (1000 x 28.60 x 0.10%)

Later ANZ Bank prices rise to AUD$32.00 / AUD$32.10

Cost to close your position = AUD$32.00 (1000 x 32.00 x 0.10%)

Trading cost = AUD$28.60 + AUD$32.00 = AUD$60.60

Finance charges for Shares CFD with IC Markets

• Shares CFD: (Number of shares) x (market closing price) x (interest rate) / 360. Fees are triple on Fridays.

If the finance charge is 8% p.a. and the closing price of the ANZ share is AUD$29.00 making your shares valued at AUD$29,000

Then the overnight interest you will pay is AUD$29,000 x 8%/360 which comes to $6.44.

note: If you hold it for more than one day then you will need to recalculate the finance charge for each day. Finance charges for Fridays are triple.

IC Market Cryptocurrency Fees

IC Market offers some ten different Cryptocurrencies. You can go long or short without actually holding the Cryptocurrency which means you can get exposure without the security risks of storing the asset. You can trade with leverage of up to 1:5.

Trading Cryptocurrency has the following fees:

• Trading Fees: Bid/Ask Spread.  Cryptocurrency is a spread only product. You enter at the Ask price and exit at the Bid price.
  • Spread =  Ask- Bid
• Rolling / Overnight Fees:  You will incur an overnight charge if you hold your position after trading hours has closed for the day. To calculate you finance charge apply the formula
  • Finance Charge or Finance Credit = No of Lots x closing Market price x interest rate/360. Fees are triple on Fridays to cover the weekend period when trading is inactive.

IC Markets Commodity Fees

There are 19 commodities available with IC Markets covering energies, precious metals and agriculture.  Supply and demand can change dramatically giving you good opportunities to good returns.

When trading commodities, you can trade on both spot prices and futures with leverage of up to 1:500.

Fees with IC Markets

• Trading Feed: Your brokerage charge will usually be AUD$3.50 per standard lot which is calculated in the base currency of your account.
• Overnight charges:
  • Spot prices: Finance Charge/Credit = No. Lots x swap points (long or short) x point size
    • The overnight charge is triple on Wednesdays to cover the weekend when the market is closed.
  • Futures: No finance or credit charge

IC Markets Index Fees

IC Markets offer 16 indices which cover a wide range of large-cap blue-chip stocks and generally move in line with the market. With IC Markets you can use MetaTrader 4, 5 and cTrader platforms. Leverage of 1:200 is available.

Index CFD is a spread only product this means there is no commission charge.

IC Market Index Fees

• Trading Fees: Bid/Ask Spread is your brokerage charge. This is Spread = Ask-bid
• Rolling Fees: If you hold your position aftermarket closing hours you will incur the following overnight charge
  • Finance Charge/Credit = Number of Lots x swap points (long or short).
    • Swap points: Swap long/short = closing index price x interest rate/360

IC Markets Bonds Fees

IC Markets offer a selection of 6 highly-rated government issues debt securities from a range of governments around the world. Available on the MetaTrader 4 and 5 platforms (not cTrader) you can trade 24/5 and use leverage of up to 1:200.

With IC Markets Bonds, you will incur the following costs:

• Trading Fees: Bonds are a spread only product. There is no commission.

Non Trading Charges

One of the great features of trading with IC Markets is that they do not have non-trading fees.

• No deposit fees
• No withdrawal fees
• Zero account inactivity fees

This means IC Markets compares well with other brokers as shown in the table below.

When it comes to funding IC Markets offers a choice of 15 funding options with a choice of 10 different base currencies. Many of these options have instant deposits.

Note: while IC Markets do not charge fees for funding, some international banking merchants may charge fees from their end.

Other Fees

IC Markets have a range of features you may opt to take advantage off to enhance your trading experience.

Demo Account:

IC Markets demo account is free for all the IC Markets trading account types and both MetaTrader and cTrader platforms. There is no limit on the time you have access to the demo account.

MT4 Advanced Trader Tools

IC Markets offer 20 additional trading tools that do not come with MetaTrader 4.  The app offers institutional level trading features that help you make better trading decisions and superior execution and more advanced account management tools.

Mirror Trading /Copy Trading Tools

IC Markets have Myfxbook and ZuluTrader are social copy or mirroring tools that integrate with your trading platform.

To use these trading tools you must be using IC Markets standard account.

With IC Markets social copy tools, you will incur the following costs:

• MyfxBook: 0.6pip (+ 1pip for standard account)
• ZuluTrader: 1.5 pips (+ 1pip for standard account)