Arbitrage trading is a technique used to take advantage of differences in price in substantially identical assets across different markets or in different types of instruments. The process involves the simultaneous buying and selling of an asset in order to profit from a discrepancy in the price in two different markets or exchanges. The existence of arbitrage trading opportunities helps keep financial markets efficient and liquid, and ensures that large price deviations do not exist for extended periods.
In this guide, we explain how it works and list the best brokers for arbitrage trading if you’re a retail investor interested in forex and other global financial markets.
Top-Rated Brokers For Arbitrage Trading
We checked these brokers cater to retail investors looking to deploy arbitrage-style strategies with key components like fast execution and low fees:
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- Demo account
- Regulator: ASIC, CySEC, FSA, SCB, CMA-Kenya
- Min. deposit: $200
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- Demo account
- Platforms: MT4, MT5, TradingCentral
- Min. deposit: $5
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- Demo account
- Regulator: CySEC, MISA
- Platforms: MT4, MT5
84.6% of retail CFD accounts lose money. -
- Demo account
- Min. deposit: $100
- Min. trade: 0.01 Lots
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- Demo account
- Regulator: ASIC, CySEC, FSCA, BVI FSC
- Platforms: Web Platform, MT4, MT5, TradingCentral
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- Demo account
- Regulator: FCA, ASIC, CySEC, SCA, SCB, CMA-Kenya
- Platforms: Web Platform, MT4, TradingView
Learn how we test brokers and why you can trust our ratings.
This is why we think these brokers are the best in this category in 2026:
- IC 4.8/5 IC stood out for its ultra-fast execution in testing, averaging under 40ms on the Raw Spread account. Slippage was minimal, and we never experienced requotes, even during high-volatility events. Its deep liquidity and ECN setup make it a top-tier choice for scalpers and algorithmic traders.
- XM 4.8/5 XM’s Market Maker model executes 99% of orders in under one second (~139–184 ms), with no requotes up to 50 lots and negligible slippage on Ultra‑Low accounts. Connecting via servers near London, New York, Amsterdam, and Singapore maintains low latency globally, making it ideal for day traders, especially scalpers, who need reliable fills.
- FXCC 4.6/5 FXCC showed reliable execution with no requotes and only minor slippage on fast-moving pairs during our evaluations. Orders filled quickly on the ECN XL account, typically within 100ms. While not the fastest broker we’ve tested, consistency stood out, especially during news events where other brokers often struggled to maintain stability.
- AvaTrade 4.9/5 When we tested AvaTrade, execution speeds were solid across both the web and mobile platforms, though not as fast as ECN brokers. Market orders filled reliably with minimal slippage, and we didn’t encounter any requotes. AvaProtect didn’t impact execution, making it a decent option for steady, low-stress trading.
- Markets.com 4.4/5 Established in 2008, Markets.com is a long-standing, multi-regulated broker with oversight from the CySEC and FSCA. It offers unique features to track hedge fund moves and insider trades, while providing stock signals to alert traders to market opportunities. Its choice of accounts (Classic to Professional) caters to all levels of active trader. 72.3% of retail accounts lose money.
- Capital.com 4.3/5 Established in 2016, Capital.com initially focused on CFDs across forex, indices, stocks, commodities, and crypto, aimed squarely at active traders. Over the years it has added more instruments, obtained multiple regulatory licenses, improved its charting tools, and introduced an 1X account that lets you trade without using margin (borrowed funds), now catering to a diverse mix of traders worldwide.
Community Sentiment
See how users rate these brokers based on the average customer ratings submitted on DayTrading.com, plus ratings from Trustpilot, the Apple App Store and Google Play.
| Broker | Our Users' Rating | Trustpilot Score | Trustpilot Reviews | iOS App Rating | Android App Rating |
|---|---|---|---|---|---|
| IC | 3 | ||||
| XM | 3085 | ||||
| FXCC | 227 | ||||
| AvaTrade | 13695 | ||||
| Markets.com | 1260 | ||||
| Capital.com | 15246 |
IC
IC (formerly IC Markets) offers superior pricing, exceptionally fast execution and seamless deposits. The introduction of advanced charting platforms, notably TradingView, and the Raw Trader Plus account, ensures it remains a top choice for intermediate to advanced day traders.
Christian Harris, Reviewer
IC quick facts
- Demo Account
- ✔Yes
- Instruments
- CFDs, Forex, Stocks, Indices, Commodities, Bonds, Futures, Crypto
- Regulator
- ASIC, CySEC, FSA, SCB, CMA-Kenya
- Platforms
- MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade, Quantower
- Minimum Deposit
- $200
- Minimum Trade
- 0.01 Lots
- Account Currencies
- USD, EUR, GBP, CAD, AUD, NZD, JPY, CHF, HKD, SGD
Pros
- IC offers fast and dependable 24/7 support based on firsthand experience, particularly when it comes to accounts and funding issues.
- IC offers among the tightest spreads in the industry, with 0.0-pip spreads on major currency pairs, making it especially cost-effective for day traders.
- As a tightly regulated and widely respected broker, IC prioritizes client security and transparency, helping to ensure a reliable trading experience globally.
Cons
- There are fees for certain withdrawal methods, including a $20 wire charge, which can eat into profits, especially for frequent withdrawals.
- Interest isn't paid on unused cash, an increasingly popular feature found at alternatives like Interactive Brokers.
- While IC offers a selection of metals and cryptos for trading via CFDs, the range is not as extensive as brokers like eToro, limiting opportunities for traders interested in these asset classes.
XM
With a low $5 minimum deposit, advanced charting platforms in MT4 and MT5, expanding range of markets, and a Zero account offering spreads from 0.0, XM provides all the essentials for active traders.
Christian Harris, Reviewer
XM quick facts
- Demo Account
- ✔Yes
- Instruments
- CFDs, Forex, Stocks, Commodities, Indices, Thematic Indices, Precious Metals, Energies
- Regulator
- CySEC, DFSA, FSCA, SCA, FSA, FSC-Belize, FSC-Mauritius, CMA-Kenya, CMA-UAE
- Platforms
- MT4, MT5, TradingCentral
- Minimum Deposit
- $5
- Minimum Trade
- 0.01 Lots
- Account Currencies
- USD, EUR, GBP, JPY, ZAR
Pros
- XM’s customer support has delivered over years of testing, with 24/7 assistance in 30 languages, response times of under 2 minutes and a growing Telegram channel.
- XM’s Zero account is ideal for day trading with spreads from 0.0 pips, 99.35% of orders executed in <1 second, and no requotes or rejections.
- XM stands out for its commitment to trader education, with a wealth of well-presented resources, including webinars, tutorials, and even real-time trading sessions through XM Live.
Cons
- XM is falling behind the curve by not offering cTrader, which is favored over MetaTrader by some serious traders for its smoother user experience and superior charting package.
- XM relies solely on the MetaTrader platforms for desktop trading, so there’s no in-house downloadable solution for a more beginner-friendly user experience with unique features.
- Although trusted and generally well-regulated in some regions, XM also has global entities registered with the weak regulators like FSC (Belize) and FSA (Seychelles), whilst UK clients are no longer accepted, reducing its market reach.
FXCC
FXCC continues to prove itself an excellent option for day traders with a particularly strong selection of 70+ currency pairs, ultra-tight spreads from 0.0 pips during testing, and a free VPS for qualifying traders.
Jemma Grist, Reviewer
FXCC quick facts
- Demo Account
- ✔Yes
- Instruments
- CFDs, Forex, Stocks, Indices, Metals, Energies, Crypto
- Regulator
- CySEC, MISA
- Platforms
- MT4, MT5
- Minimum Deposit
- $0
- Minimum Trade
- 0.01 Lots
- Account Currencies
- USD, EUR, GBP, CAD
Pros
- The free VPS for qualifying traders and the ability to build or buy EAs on MetaTrader make FXCC a strong option for algo traders.
- FXCC’s ECN XL account has been built with active traders in mind, featuring spreads from 0.0 with no commission, while also passing our execution speed benchmark for day traders.
- Customer support still relies on human agents with response times of under three minutes on live chat during our tests and knowledgeable reps - a welcome break from the frustrating AI chatbots increasingly offered by brokers.
Cons
- Although the economic calendar has benefited from a facelift, FXCC still offers very little in terms of market research beyond basic daily technical analysis and aggregated market news, with no tools like Autochartist or social sentiment data.
- FXCC charges steep withdrawal fees on many of its payment methods, including $45 for bank transfers and 2% crypto transfers, which may cut into the returns of traders making regular withdrawals.
- Although FXCC has bolstered its range of markets with US, European and Asian stocks, the choice of metals and energies is light, and there are no soft commodities.
AvaTrade
Celebrating 20 Years in the industry, AvaTrade offers active traders everything they need: an intuitive WebTrader, powerful AvaProtect risk management, a smooth 5-minute sign-up process, and dependable support you can rely on in fast-moving markets.
Jemma Grist, Reviewer
AvaTrade quick facts
- Demo Account
- ✔Yes
- Instruments
- CFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Crypto, Spread Betting, Futures
- Regulator
- ASIC, CySEC, FSCA, ISA, CBI, JFSA, BVI, FSRA/ADGM, AFM, CMA-Kenya, CIRO (via Friedberg Direct)
- Platforms
- WebTrader, AvaTradeGO, AvaOptions, AvaFutures, MT4, MT5, AlgoTrader, TradingView, TradingCentral, DupliTrade
- Minimum Deposit
- $100
- Minimum Trade
- 0.01 Lots
- Account Currencies
- USD, EUR, GBP, CAD, AUD, ZAR
Pros
- Support at AvaTrade performed excellently during testing, with response times of 3 minutes and localized support in major trading jurisdictions, including the UK, Europe and the Middle East.
- AvaTrade launched AvaFutures to offer low-margin access to global markets, then expanded in 2025 as one of the first brokers to add CME’s Micro Grain Futures.
- The WebTrader excelled in our hands-on tests, sporting a user-friendly interface for beginners, complete with robust charting tools like 6 chart layouts and 60+ technical indicators.
Cons
- The AvaSocial app is good but not great – the look and feel, plus the navigation between finding strategy providers and account management needs upgrading to rival category leaders like eToro.
- While signing up is a breeze, AvaTrade lacks an ECN account like Pepperstone or IC Markets, which provides the raw spreads and ultra-fast execution many day traders are looking for.
- AvaTrade’s WebTrader has improved, but work is still needed in terms of customizability – frustratingly widgets like market watch and watchlists can’t be hidden, moved, or resized.
Markets.com
Markets.com is best suited to retail investors who trade frequently but don’t want to calculate commissions, thanks to its spread-only pricing (EUR/USD around 1.3 pips). It especially appeals to short-term traders who value fast execution, flexible asset choice spanning 2,200+ instruments and proprietary tools like hedge fund confidence indices and insider trade alerts.
Christian Harris, Reviewer
Markets.com quick facts
- Demo Account
- ✔Yes
- Instruments
- CFDs, Forex, Stocks, Commodities, Indices, Crypto, ETFs, Bonds
- Regulator
- ASIC, CySEC, FSCA, BVI FSC
- Platforms
- Web Platform, MT4, MT5, TradingCentral
- Minimum Deposit
- $200
- Minimum Trade
- 0.01 Lots
- Account Currencies
- USD, EUR, GBP, AUD, ZAR, SEK, NOK, DKK, CHF, PLN, CZK
Pros
- Switching between the proprietary web platform (great for alerts and quick analysis) and MT5 (strong for algorithmic EAs) was smooth in our tests; positions synced across desktop, web, and mobile without gaps or re-quotes.
- Within the 2,200+ CFDs, Markets.com offers thematic baskets like the Warren Buffett Blend and Cannabis Blend, which behaved like ready-made mini-ETFs during testing, saving the work of balancing weights manually.
- Markets.com’s Hedge Fund Confidence and Insider Trading tools pulls SEC filings into the dashboard within 24 hours of disclosure, helping to spot fund moves and C-suite buys before most retail newsfeeds updated.
Cons
- Inactivity charges kick in after just 3 months, while variable spreads are wider than top ECN brokers during testing, which may deter day traders and high-frequency traders.
- During sign-up, we hit unclear account type explanations and got stuck in an email verification loop that locked us out for an hour - way less streamlined than other brokers we’ve tested.
- While CySEC and FSCA oversight is solid, the SVGFSA and BVIFSC entities offers 1:500 leverage under a light-touch framework, meaning protections like compensation schemes and strict conduct rules lag behind the strictest regulatory standards.
Capital.com
Capital.com is a great match for day traders with its thousands of CFDs, SmartFeed providing tailored market updates, and TradingView charts for advanced technical indicators paired with Capital.com’s fast and reliable order execution.
Christian Harris, Reviewer
Capital.com quick facts
- Demo Account
- ✔Yes
- Instruments
- CFDs on Forex, Stocks, Indices, Commodities, ETFs, Crypto
- Regulator
- FCA, ASIC, CySEC, SCA, SCB, CMA-Kenya
- Platforms
- Web Platform, MT4, TradingView
- Minimum Deposit
- $20
- Minimum Trade
- 0.01 Lots
- Account Currencies
- USD, EUR, GBP, AUD, SEK, NOK, DKK, CHF, HKD, PLN, CZK, AED, HUF, MXN
Pros
- Capital.com has an especially strong selection of forex (120+), commodities (70+) and cryptos (500+ pairs), catering to traders interested in these asset classes and needing depth.
- Traders who prefer robust charting can connect their Capital.com account directly to TradingView. This lets you use TradingView’s advanced tools and community ideas alongside Capital.com’s execution, blending a popular charting platform with a regulated broker’s access.
- Capital.com enhanced the mobile trading experience in 2026 with an AI assistant, live trading analytics, and a more customizable home screen with cleaner watchlists.
Cons
- Capital.com offers primarily a standard CFD account and a professional account (subject eligibility) with higher leverage, but it lacks ECN/raw spread accounts or tiered pricing, which can limit trading flexibility for high-volume scalpers.
- The broker’s research resources focus on educational content and in-house analysis but do not currently include third-party tools such as Trading Central, Autochartist, sentiment indicators, and professional-level screeners that some top competitors offer.
- While Capital.com supports MT4, it lacks MT5 integration, limiting access to advanced trading features, including additional timeframes, indicators, and order types.
Arbitrage Trading Example
Let’s say an exchange-traded product (ETF) is trading for $50 per share and its intrinsic price based on its individual components should be $50.10.
An arbitrageur will come into the picture and buy the ETF while simultaneously selling the individual stock components in the appropriate proportions – that is, sized to the weighting of the individual components and monetary amount of the long position in the ETF – until the price discrepancy is eliminated.
Arbitrage in Day Trading
Below are examples of arbitrage that day traders can realistically employ:
Merger Arbitrage
Because of modern-day technology, it is difficult for traders to take advantage of traditional statistical price arbitrage opportunities in the market. Proprietary trading firms and hedge funds often exploit these opportunities within a matter of seconds (sometimes even a fraction of a second) with high-powered computing capacity, leaving little opportunity for those with less sophisticated technology.
There are, however, different type of arbitrage in the market outside of basic statistical arbitrage. For example, there is a type of strategy known as “merger arbitrage” (sometimes called “takeover arbitrage”) in the market where traders attempt to arbitrage out risk in the markets.
Example
When company A seeks to buy company B, the former will usually pay the latter a premium – i.e., an amount above fair market value – in order to take control of the firm. If company B is trading at $100 per share before the takeover announcement and company A publicly announces that it will be buying its target for $125 per share, the market will never re-price company B at this new $125 takeover price.
This is due to the fact that it’s possible company A will retract its offer, company B may turn it down (or demand a higher price or engage in other negotiations), regulators may either block the deal or ask one or both companies to meet specific conditions that one or both sides may not be willing to meet, or some other third-party intervention could alter the prospective transaction.
Therefore, company B may price somewhat lower than the $125 takeover price, such as $120 to reflect an 80% chance of the deal closing – that is, high but not certain.
At the same time, because company A is paying beyond the market’s believed fair price for company B (and due to other factors, such as integration risk), company A’s price may fall from its current point in the market.
If company A was trading at $100 per share, it may fall to something lower, such as $96. Given the transaction has some chance of not occurring, the market would price company A’s stock at closer to $95 if there was a 100% probability of the deal going through to completion.
If a merger arbitrage trader believed that the transaction would follow through to completion – or at least has higher odds relative to those priced in – he or she would go long the target (company B trading at $120 per share) and short-sell the acquirer (company A trading at $95 per share).
Relative Value Arbitrage
If two stocks historically have high levels of correlation, it would be expected that, unless their business models fundamentally change, this correlation would continue to hold up.
Example
Goldman Sachs (GS) and Morgan Stanley (MS) have a correlation of 80% since both began trading simultaneously in May 1999. This correlation has run as high as 96% and as low as 50%
If one observed that the current correlation was in the 50%-60% range and was due to Goldman Sachs rising more than its competitor, one could take advantage of this potential opportunity by short-selling Goldman and buying Morgan Stanley. Eventually, the trading pattern between the two could be expected to revert to the mean, after which one would close the position once the correlation normalized.
Liquidation Arbitrage
Liquidation arbitrage is a type of trading by which one invests in stocks trading below their book value. The basic metric to evaluate such cases is the price-to-book ratio (P/B). If P/B < 1 – put another way, the sum of its parts is greater than the whole – then a company is trading below its book value and would be theoretically more valuable than its current stock price if the company were liquidated.
Banks commonly trade at under their book value in environments of low interest rates, flat or inverted yield curves, and high amounts of regulation.
This strategy, like others, is not foolproof. A catalyst generally needs to emerge to push the market in the right direction rather than rudimentary measures of a particular security being cheap.
This is a common strategy under the umbrella of “value investing”.
Net-net Arbitrage
This is a form of liquidation arbitrage but involves a more conservative version of the strategy. Net-net is defined as net working capital (current assets minus current liabilities) minus the long-term portion of debt – i.e., debt with maturity of greater than one year in the future (debt coming due within one year is part of current liabilities).
Some define it as net working capital minus all liabilities. When this value is greater than the market value of equity, this would suggest that there is a high chance that, should the company be liquidated, shareholders would receive more than the stock’s current value. Or the company may be poorly managed and better unlock or realize its value under new stewardship.
Why do these opportunities occasionally exist?
For one, net-net stocks tend to be smaller capitalized stocks and more easily escape Wall Street’s attention.
As companies, they may be “in limbo” and neither value-creating nor susceptible to insolvency risk in the short- or intermediate-term, leading the share price to lag what might be implicated by its balance sheet for extended periods of time.
Moreover, investors might believe that the value of its assets may be overrepresented on its balance sheet (e.g., forthcoming markdown of inventory value) and thus may truly not be an opportunity with a high margin of safety.
More on Arbitrage Trading
- Crypto Arbitrage – How to do arbitrage trading with cryptocurrencies.