A carry trade forex broker refers to a forex (Foreign Exchange) brokerage firm that supports or provides favorable conditions for the investment strategy known as “carry trading.”
Carry trading is a type of trading strategy where an investor borrows a certain amount in a currency with a relatively low interest rate, then uses these funds to invest in another currency with a higher interest rate. The trader profits from the difference between the interest rates, known as the “carry.”
In this article, we have grouped some of the best forex brokers for carry trading.
In making this ranking, we have taken the following factors into consideration:
- The mark-up on the spread
- The broker’s trading commissions
- The quantity of forex pairs
- Additional tools to help with carry trading
- The overall quality of the broker
What are the best brokers for carry trading?
Below our curated list of the best forex brokers with favorable conditions for carry trading, with details of features and characteristics.
Warning
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
IC Markets
best forex carry trading broker overall
IC Markets allows carry trade with low commissions and ECN execution. IC Markets offers spreads as low as 0 pips. IC Markets supports trading on MT4, MT5, and cTrader platforms.
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Regulations:
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Avg. EUR/USD Spread:
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About IC Markets
IC Markets is a global forex and CFD broker founded in 2007 and based in Sydney, Australia. IC Markets offers trading on over 2,250 instruments including currencies, commodities, indices, stocks, and cryptocurrencies. IC Markets provides MetaTrader 4, MetaTrader 5, and cTrader platforms. IC Markets is regulated by multiple authorities including ASIC and CySEC. IC Markets is known for its ECN execution model and low spreads. The IC Markets CEO is Andrew Budzinski.
IC Markets Features
The features of IC Markets are listed below.
- With IC Markets it is possible to carry trade with low commissions.
- IC Markets’ ECN execution allows carry traders to access the forex market with spreads as low as 0 pips.
- You can carry trade on IC Markets’ MT4, MT5, or cTrader platforms with a minimum deposit of $200.
IC Markets Pros and Cons
Advantages of IC Markets
The advantages of IC Markets are listed below.
- Low-latency trading environment
- Institutional level liquidity
- MT4, MT5, cTrader platforms are all available
Disadvantages of IC Markets
The disadvantages of IC Markets are listed below.
- Small amount of educational tools for new traders
- Small range of tradable assets compared to other CFD/Forex brokers
IG Markets
widest range of assets
IG Markets provides a wide range of forex pairs and assets suitable for carry trading. IG Markets offers spreads starting at 0.6 pips and requires a minimum deposit of $300.
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Avg. EUR/USD Spread:
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About IG Markets
IG Markets is a global online trading provider founded in 1974, offering access to over 17,000 financial markets including forex, stocks, indices, commodities, and cryptocurrencies. IG Markets provides proprietary trading platforms alongside MetaTrader 4 and ProRealTime. IG Markets is regulated by multiple top-tier authorities worldwide, including the FCA and ASIC. IG Markets is known for competitive spreads, extensive educational resources, and innovative features like weekend trading. The IG Markets’ parent company “IG Group” CEO is Breon Corcoran.
IG Markets Features
The features of IG Markets are listed below.
- IG Markets is a good broker for carry trading thanks to its wide number of forex pairs and assets available.
- IG Markets offers up to 17,000 assets in total, and over 90 forex pairs.
- Traders on IG Markets can trade forex with spreads as low as 0.6 pips.
- Trading accounts at IG Markets generally require a minimum deposit of at least $300 depending on the country of residence.
IG Markets Pros and Cons
Advantages of IG Markets
The advantages of IG Markets are listed below.
- Low spreads from 0.6 pips on Forex
- Wide range of financial instruments
- 40 years of experience in the Forex industry
Disadvantages of IG Markets
The disadvantages of IG Markets are listed below.
- No copy trading features
- No social trading features
XTB
best trading platform
XTB facilitates carry trading on numerous forex pairs. XTB offers spreads as low as 0 pips and does not require a minimum deposit. XTB provides the xStation5 platform.
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Regulations:
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Avg. EUR/USD Spread:
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About XTB
XTB is a global forex and CFD broker founded in 2002 and headquartered in Poland. XTB offers trading on over 2,000 instruments including currencies, stocks, indices, commodities, and cryptocurrencies. XTB provides the proprietary xStation platform and is regulated by multiple authorities including FCA, CySEC, and KNF. XTB is listed on the Warsaw Stock Exchange and serves over 897,500 clients worldwide. The XTB CEO is Omar Arnaout since March 2017.
XTB Features
The features of XTB are listed below.
- XTB allows carry trading on numerous forex pairs with spreads as low as 0 pips.
- XTB does not require a minimum deposit to open an account and start carry trading.
- The trading platform offered by XTB is the xStation5.
XTB Pros and Cons
Advantages of XTB
The advantages of XTB are listed below.
- No minimum deposit
- Wide selection of assets
- Competitive trading costs
Disadvantages of XTB
The disadvantages of XTB are listed below.
- Small withdrawal fee
- No social or copy trading
- XTB demo account is limited to 30 days
XM
most efficient order execution
XM ensures efficient order execution for carry trading. XM provides spreads starting at 0 pips and various account options with a minimum deposit of $5.
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Regulations:
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Avg. EUR/USD Spread:
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About XM
XM is a global forex and CFD broker founded in 2009, offering trading on currencies, commodities, indices, stocks, and cryptocurrencies. XM provides MetaTrader 4, MetaTrader 5, and proprietary platforms. XM is regulated by multiple authorities including CySEC, ASIC, and IFSC. XM is known for competitive spreads, extensive educational resources, and multilingual customer support. XM serves over 5 million clients from 196 countries. XM offers various account types and a no-requote policy.
XM Features
The features of XM are listed below.
- XM is a good broker for carry trading because of its efficient order execution.
- XM’s spreads start at 0 pips, and the broker offers a large number of accounts to choose from.
- XM’s minimum deposit is generally $5 on the accounts offered.
XM Pros and Cons
Advantages of XM
The advantages of XM are listed below.
- There’s a wide range of account types
- The demo account at XM is unlimited
- Wide range of educational resources
Disadvantages of XM
The disadvantages of XM are listed below.
- No social trading features available
- The account availability changes depending on the location of the trader
- High minimum deposit to invest in securities ($10000 for the XM Shares account)
HF Markets
most flexible forex carry trade broker
HF Markets supports carry trading on over 40 forex pairs with spreads starting at 0 pips. HF Markets requires no minimum deposit to open an account.
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Avg. EUR/USD Spread:
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About HF Markets
HF Markets, formerly known as HotForex, is a global multi-asset broker founded in 2010. HF Markets offers trading on forex, stocks, commodities, indices, and cryptocurrencies through MetaTrader platforms. HF Markets is regulated by multiple authorities including CySEC, FCA, DFSA, and FSCA. HF Markets serves clients worldwide and is known for competitive trading conditions and extensive educational resources. HF Markets recently rebranded to emphasize its expanded product range. The HF Markets Group CEO is George Koumantaris.
HF Markets Features
The features of HF Markets are listed below.
- With HF Markets, carry traders can trade over 40 forex pairs.
- Spreads on HF Markets start at 0 pips depending on account type.
- The minimum deposit to open an account and do carry trading on HF Markets is $0.
HF Markets Pros and Cons
Advantages of HF Markets
The advantages of HF Markets are listed below.
- High Leverage Options
- Low Minimum Deposit
- Wide Range of Trading Instruments
Disadvantages of HF Markets
The disadvantages of HF Markets are listed below.
- Higher Trading Costs
- Limited Educational Resources
Pepperstone
great for low spread carry trading
Pepperstone enables carry trading with some of the industry’s lowest spreads, starting at 0 pips. Pepperstone supports trading on MT4, MT5, and cTrader platforms.
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Regulations:
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Avg. EUR/USD Spread:
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Platforms:
About Pepperstone
Pepperstone is a global forex and CFD broker founded in 2010 in Melbourne, Australia. Pepperstone offers trading on currencies, commodities, indices, stocks, and cryptocurrencies through MetaTrader and cTrader platforms. Pepperstone is regulated by multiple authorities including ASIC, FCA, and CySEC. Pepperstone is known for competitive spreads, fast execution, and extensive educational resources. Pepperstone serves clients in over 160 countries worldwide. The Pepperstone CEO is Tamas Szabo.
Pepperstone Features
The features of Pepperstone are listed below.
- Through Pepperstone it is possible to carry trade with one of the lowest spreads in the industry.
- On Pepperstone, spreads start at 0 pips, averaging 0.09 pips on the EUR/USD pair.
- Pepperstone allows you to open trading accounts on MT4, MT5, and cTrader with a minimum deposit of $200.
Pepperstone Pros and Cons
Advantages of Pepperstone
The advantages of Pepperstone are listed below.
- Stable raw spreads (0,09 pips on EUR/USD on average)
- Caters for algorithmic trading
- Has won over 30 Forex industry awards
Disadvantages of Pepperstone
The disadvantages of Pepperstone are listed below.
- The demo account is not unlimited
FxPro
large number of trading platforms
FxPro allows carry trading across MT4, MT5, and cTrader platforms. FxPro offers spreads starting at 0 pips, varying by account type. FxPro requires a $100 minimum deposit.
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Regulations:
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Avg. EUR/USD Spread:
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Platforms:
About FxPro
FxPro is a global online broker founded in 2006, offering trading on forex, CFDs, stocks, indices, commodities, and cryptocurrencies. FxPro provides multiple trading platforms including MetaTrader 4, MetaTrader 5, cTrader, and its proprietary FxPro Platform. FxPro is regulated by multiple authorities including FCA, CySEC, SCB, FSC and KNN. FxPro serves clients in over 170 countries and has won numerous industry awards. The FxPro CEO is Charalambos Psimolophitis.
FxPro Features
The features of FxPro are listed below.
- With FxPro, carry trading is possible on three different platforms, MT4, MT5, and cTrader.
- Spreads on FxPro start at 0 pips, but vary depending on the type of account you choose.
- To open a real account at FxPro and start carry trading, $100 is required.
FxPro Pros and Cons
Advantages of FxPro
The advantages of FxPro are listed below.
- Regulated and Trusted Forex broker
- Diverse Trading Platforms
- Wide Range of Instruments
Disadvantages of FxPro
The disadvantages of FxPro are listed below.
- Inactivity Fee
- Limited Educational Resources
- No Guaranteed Stop-Loss Orders
FBS
lowest minimum deposit
FBS provides high leverage for carry trading up to 1:3000. FBS allows spreads as low as 0.7 pips. FBS requires a minimum deposit from $5.
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Avg. EUR/USD Spread:
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About FBS
FBS is a global forex and CFD broker founded in 2009, offering trading on currencies, commodities, indices, stocks, and cryptocurrencies. FBS provides MetaTrader 4, MetaTrader 5, and proprietary platforms. FBS is regulated by multiple authorities including CySEC, ASIC, and IFSC. FBS serves over 27 million clients in 150+ countries. FBS is known for low minimum deposits, extensive educational resources, and copy trading services.
FBS Features
The features of FBS are listed below.
- FBS is the highest leveraged carry trading broker, as it offers levers up to 1:3000 under IFSC.
- On FBS it is possible to trade with spreads as low as 0.7 pips.
- FBS offers accounts on several platforms, including MT4 and MT5, and requires a minimum deposit starting at $5.
FBS Pros and Cons
Advantages of FBS
The advantages of FBS are listed below.
- Low minimum deposit
- User-Friendly Platforms
- 90 international awards
Disadvantages of FBS
The disadvantages of FBS are listed below.
- Limited Financial Instruments
OctaFX
carry trading broker for beginners
OctaFX features a swap rate calculator for carry trading. OctaFX offers spreads starting from 0.2 pips. OctaFX allows new accounts with a $25 minimum deposit.
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Avg. EUR/USD Spread:
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About OctaFX
Octa, formerly known as OctaFX, is a global forex and CFD broker founded in 2011. Octa offers trading on currencies, commodities, indices, stocks, and cryptocurrencies through MetaTrader 4, MetaTrader 5, and proprietary platforms. Octa is regulated by multiple authorities including CySEC. Octa is known for competitive spreads, extensive educational resources, and copy trading services. Octa serves clients in over 100 countries worldwide.
OctaFX Features
The features of OctaFX are listed below.
- OctaFX has a comprehensive calculator that allows traders to work out how their swap rate for different currency pairs.
- New traders can open an OctaFX trading account for $25.
- The spreads on OctaFX start from 0.2 pips.
OctaFX Pros and Cons
Advantages of OctaFX
The advantages of OctaFX are listed below.
- Low Trading Costs
- Robust Educational Resources
- Multiple Trading Platforms
Disadvantages of OctaFX
The disadvantages of OctaFX are listed below.
- Limited Asset Range
- No VIP Discounts
- Restrictions on High-Frequency Trading
Interactive Brokers
best for professional forex carry traders
Interactive Brokers supports carry trading on multiple platforms, including proprietary options. Interactive Brokers offers spreads as low as 0 pips. Interactive Brokers requires no minimum deposit.
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Avg. EUR/USD Spread:
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Platforms:
About Interactive Brokers
Interactive Brokers is a global electronic broker founded in 1978, offering trading in stocks, options, futures, forex, bonds, ETFs, and cryptocurrencies across 150 markets in 33 countries. Interactive Brokers provides advanced trading platforms, low commissions, and access to a wide range of financial instruments. Interactive Brokers is known for its sophisticated technology and serves both retail and institutional clients. Interactive Brokers is regulated by multiple top-tier authorities worldwide. The CEO of the Interactive Brokers Group is Milan Galik.
Interactive Brokers Features
The features of Interactive Brokers are listed below.
- At Interactive Brokers, carry trading is possible on several platforms, including MT4 and the broker’s proprietary one.
- The service offered by Interactive Brokers offers spreads as low as 0 pip, with over 100 forex pairs to choose from.
- There is no minimum deposit to open a real account with Interactive Brokers.
Interactive Brokers Pros and Cons
Advantages of Interactive Brokers
The advantages of Interactive Brokers are listed below.
- Low Trading Fees
- Advanced Trading Tools
- Wide Market Access
Disadvantages of Interactive Brokers
The disadvantages of Interactive Brokers are listed below.
- Not user-friendly
- No MetaTrader Support
- Additional Fees
What is forex carry trading?
A carry trade in forex may sound complex, but is actually not too complicated, and another potential way to profit. It is in fact a trading strategy that involves two currencies. One of these is what is considered a high interest currency, the other, a low interest currency.
As a carry trader, you will attempt to borrow at a low interest rate, and invest this money in a place that returns a high interest rate, in this case, all in the form of foreign currency pairs. By borrowing a pair at a low interest rate, and investing in a pair with a high interest rate, you should be able to exploit the percentage difference as profit.
How to choose a carry trade forex broker
Choosing the right broker can significantly impact the success of your carry trade strategy. Here’s a step-by-step guide to ensure you pick the best one:
- Ensure the broker is regulated by recognized and reputable bodies such as the Financial Conduct Authority (FCA) in the UK, the Australian Securities and Investments Commission (ASIC), the National Futures Association (NFA) in the US, or European regulators like the Cyprus Securities and Exchange Commission (CySEC). Regulated brokers adhere to strict standards, ensuring the safety of your funds and fair trading practices.
- It’s beneficial to choose a broker that provides timely insights and news about currency interest rates and global macroeconomic events. These updates can help traders make informed decisions and understand the potential impact on carry trades.
- Considering the nature of carry trades where positions are held for extended periods, it’s crucial to select a broker with competitive fee structures. Aim for those offering spreads under 1 pip for popular forex pairs. Additionally, understand other fees like overnight financing or swap rates, especially since carry trades often involve holding positions overnight.
How does forex carry trading work?
As a simple carry trade example, let’s imagine that you borrow a low interest currency (LIC) at an example rate of 1%, and you use that to buy into a high interest currency (HIC) that earns typically 3%. You should expect a 2% profit. to illustrate this example:
With an exchange rate of 10.00:
100 LIC will purchase 1000HIC.
After a period of time, the HIC gains 3% to 1030.
The LIC gains 1% to 101.
With the exchange rate remaining unchanged, you would now have 1030 HIC which converts back to 103 LIC representing a 2 LIC profit, or 2%.
Of course, the interest rates may change during this time. This can certainly lead to fluctuation in profits and losses that you need to be mindful of. The above example is put forward in the table below:
| TIMEFRAME | LIC (1%) | HIC (3%) | |
|---|---|---|---|
| Let’s buy HIC with LIC | 100 | → | 1000 |
| After the interest | 101 | 1030 | |
| Let’s get the LIC back | 103 | ← | 1030 |
| Gains | 103-101 = 2 LIC |
How to find the best forex carry trade currencies for 2023
In order to find the best forex carry trade currencies you can use forex or financial news sites that showcase the current state of global economy and the currencies exchange rates.
Sites such as FxStreet can be a good start for forex carry traders, as they offer a detailed economic calendar with world currencies interest rates.
From here, the next step is to find good interest rates differentials. In other words, you can take a look at the interest rate of the USD currency, and then take a look at the EUR interest rates. If the interest rate differential is wide between the 2 currencies, you might want to check with your forex broker if it’s worth opening a trading position.
Carry trade pros and cons
Pros
- The carry trade is very flexible in the sense it can apply to any number of currencies moving in either direction. A wealth of opportunity.
- Like many forms of trading, a carry trade relies on, and rewards your knowledge and awareness of the markets and current trends.
Cons
- If the interest rate changes at any point during your trading process, then it can ruin the entire trade and the profitability you spotted.
- Carry trading is not suitable for those Islamic traders who wish to remain compliant with Shariah law.