Forex Brokers that Accept US Clients
Forex brokers that extend their services to US clients allow individuals in the United States to engage in online currency trading. Despite the regulatory complexities surrounding forex trading in the US, these brokers can comply with the strict regulations set forth by the US regulatory authorities, such as the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). Below is a list of Forex Brokers accepting US traders as clients:
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FAQ
Which Forex Brokers are Legal in the US?
Several forex brokers are legally approved to offer trading services in the United States. According to the latest data from the CFTC as of October 2022, among the 62 registered Futures Commission Merchants (FCMs), at least six have the required licenses and regulatory capital to provide legal forex trading to U.S. residents. Based on this information, the following brokers are known to offer legal forex trading options in the US:
- IG - National Futures Association (NFA 0509630)
- FOREX.com - National Futures Association (NFA 0339826)
- OANDA - National Futures Association (NFA 0325281)
- TD Ameritrade - National Futures Association (NFA 0506639)
- Interactive Brokers - National Futures Association (NFA 0392970)
- Trading.com - National Futures Association (NFA 0516820)
Why Are There Only a Few Brokers Accepting US Clients?
Despite the New York session's substantial influence on currency rate fluctuations, the participation of US-based retail traders remains relatively modest. A trader in the US can engage in online FX trading with the same ease as someone residing in Europe or Australia. However, the key distinction lies in the range of broker options available to traders. There are various reasons why fewer forex brokers choose to welcome U.S. clients:
- Rules and Regulations: Unlike Europe, where one license can cover many countries, the US demands NFA regulation, requiring brokers to have a substantial $20 million in capital. This hefty sum and legal costs make the US market pricier to enter.
- Profits Challenge: Despite a big US population, restricted leverage (50:1 for majors, 20:1 for minors) means smaller broker profits than Europe's 500:1. High wages in the US also drive up operational expenses.
- Regulatory Scrutiny: US regulators have hit brokers with hefty fines ($200,000 to $2 million) for misconduct. This strict oversight can dent broker profits significantly.
- Competition Shift: US traders lean more towards stocks than forex, which can be more lucrative for brokers due to higher trading costs. US brokers compete not just with each other, but also need to win over stock traders to forex trading.
Do Forex Traders Pay Tax in the US?
Forex traders in the U.S. must deal with taxes on their trading endeavors. The tax rules vary based on whether they're considered traders or investors. Profits from forex trading are hit with self-employment tax for traders, whereas forex investors deal with capital gains tax.
For capital gains tax, it's like this: the rate could be 0%, 15%, or 20%, depending on how much you're raking in. You might be forking over a bit more if you bring in the big bucks. And remember, those numbers get tweaked yearly for inflation's sake.
How Much Do Forex Traders Make a Day in the US?
So, here's the scoop on how much a forex trader can pull in daily – it depends on each individual. Your experience, strategy, risk smarts, and how wild the market's feeling all play a role. If you're just starting, you might hit around $50 to $100 a day. But if you're seasoned and riding the waves, you could be looking at $500 to even $1,000 daily.
Based on ZipRecruiter, as of Aug 24, 2023, the average annual pay for a Forex Trader in the United States is $103,290 annually. Just in case you need a simple salary calculator, that works out to be approximately $49.66 an hour. This is the equivalent of $1,986/week or $8,607/month.
How Much Leverage Can You Get in Forex in the US?
Regarding forex trading, the U.S. is like the rulebook enforcer. While other places like Europe and Australia are cool with crazy 500:1 leverage, the U.S. plays it safe.
Traders in the U.S. face some important do's and don'ts. One major no-no is trading with brokers not approved by the authorities. This rule aims to keep risks and market swings in check and put the brakes on over-the-top speculation. The authority also keeps a leash on leverage, which means traders can't borrow too much for trading. These limits differ based on what you're trading and your account type, but they usually range between 1:10 to 1:50 leverage.
Additional FAQ
Are US brokers allowed to accept clients from around the world according to CFTC regulations?
No. US forex brokers are allowed to serve only US citizens and US permanent residents.
Continue Reading at Comparing US and Offshore Forex Brokers
How much does it cost to get broker license in US?
The US trade market is strictly regulated by several different authorities. With a registered capital of USD250,000 and the brokerage license costs that possibly reach USD1,000,000, getting everything approved and signed off can take up to 1.5 years in total.
Continue Reading at Top Countries to Apply for Brokerage Licenses
Why does NFA ban the use of e-payment as deposit method?
Remember that the ban applies to not only funding via credit cards but also other linked electronic payment methods that usually draw funds from the customer's credit card. This includes payment though PayPal and Skrill, among many others.
According to the NFA, this decision will limit potential scams and encourage traders only to use their funds. Depositing via traditional bank transfer methods and debit cards is still acceptable to fund an account if you're trading with a US broker. Also, US check payments and fund transfers conducted through an automated clearing house are still viable. Still, some brokers had anticipated a decline in new clients due to this regulation.
Continue Reading at The Problems with Forex Brokers that Accept Credit Cards
Does the CFTC only regulate forex brokers?
In America, each legal company must register themselves at the CFTC. However, not all companies registered there are forex brokers; it could be a business company, publishing company, and so on.
Continue Reading at Forex Regulation Insights: Defining Your Broker's Status
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