Best Market Maker Brokers

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Written By
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Written By
Royston Wild
Royston is an experienced investor and writer. His expertise includes stock recommendations through to commodities, forex, and macroeconomic news. Royston's background includes roles as a stocks and commodities reporter, and editor of forex coverage at Shares Magazine.
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Edited By
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Edited By
James Barra
James is an investment writer with a background in financial services. He has worked as a management consultant, where he delivered large-scale operational transformational programmes at some of Europe's biggest banks. James authors, edits and fact-checks content for a series of investing websites.
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Market maker brokers are companies that buy and sell financial assets with the use of their own inventories. They allow markets to operate smoothly by supplying deep liquidity and provide important benefits for short-term traders.

This guide will explain how they work, plus the advantages and disadvantages you can experience by day trading with a market maker broker. We’ve also evaluated a long row of companies to bring you our pick of the best market maker brokers.

Best Market Maker Brokers 2024

These are the top market-making brokers based on our exhaustive reviews:

Click a broker for details
  1. 1
    OANDA US
    CFDs are not available to residents in the United States.

    Ratings
    4.5 / 5
    3.5 / 5
    2.8 / 5
    4 / 5
    4.5 / 5
    3.5 / 5
    4.3 / 5
    3.8 / 5
    4.7 / 5
    3.7 / 5

    $0
    0.01 Lots
    1:50
    NFA, CFTC
    Forex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA)
    OANDA Trade, MT4, TradingView, AutoChartist
    Wire Transfer, Visa, Mastercard, Debit Card, ACH Transfer
    USD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD
  2. 2
    IG
    Forex trading involves risk. Losses can exceed deposits.

    Ratings
    4.9 / 5
    4 / 5
    4.5 / 5
    3.5 / 5
    4.8 / 5
    4.5 / 5
    4.9 / 5
    5 / 5
    4.6 / 5
    4 / 5

    $0
    0.01 Lots
    1:30 (Retail), 1:250 (Pro)
    FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB
    CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting
    Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral
    PayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit Card
    USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD
  3. 3
    Plus500 US
    Welcome Deposit Bonus up to $200
    Trading with leverage involves risk.

    Ratings
    3.5 / 5
    3.7 / 5
    3.5 / 5
    3.3 / 5
    3.3 / 5
    3.5 / 5
    2.8 / 5
    3.5 / 5
    4.1 / 5
    4.3 / 5

    $100
    0.0 Lots
    CFTC, NFA
    Futures on Forex, Commodities, Cryptos, Indices, Interest Rates
    WebTrader, App
    ACH Transfer, Wire Transfer, Debit Card, Mastercard, Visa
    USD
  4. 4
    Firstrade
    Deposit Bonus Up To $4000

    $0
    $1
    SEC, FINRA
    Stocks, ETFs, Options, Mutual Funds, Bonds, Cryptos, Fixed
    Own
    ACH Transfer, Wire Transfer, Cheque, Automated Customer Account Transfer Service
    USD

Here is a summary of why we recommend these brokers:

  1. OANDA US - OANDA is a popular brand offering exceptional execution, low deposit requirements and advanced charting and trading platform features. The top-rated brand has over 25 years of experience and is regulated by trusted agencies, including the NFA/CFTC. Around the clock support is available for short-term traders, alongside flexible contract sizes and automated trade executions.
  2. IG - Founded in 1974, IG is part of IG Group Holdings Plc, a publicly traded (LSE: IGG) brokerage. The brand-US offers spread betting, CFD and forex trading across an almost unrivalled selection of 17,000+ markets, with a range of user-friendly platforms and investing apps. For 50 years, IG has maintained its position as an industry leader, excelling in all key areas for traders.
  3. Plus500 US - Plus500 is a well-established broker that entered the US market in 2021. Authorized by the CFTC and NFA, it provides futures trading on forex, indices, commodities, cryptocurrencies, and interest rates. With a 10-minute sign-up, a manageable $100 minimum deposit, and a straightforward web platform, Plus500 continues to strengthen its offering for traders in the US.
  4. Firstrade - Firstrade is a US-headquartered discount broker-dealer with authorization from the SEC. The company is also a member of FINRA/SIPC. With welcome bonuses, powerful tools and apps, plus commission-free trading, Firstrade Securities is a popular online brokerage. It is also quick and easy to open a new account.

Best Market Maker Brokers Comparison

Best Market Maker Brokers Comparison
Broker Market Maker Minimum Deposit Investment Offering Trading Platforms Financial Regulators
OANDA US logo
$0 Forex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA) OANDA Trade, MT4, TradingView, AutoChartist NFA, CFTC
IG logo
$0 CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB
Plus500 US logo
$100 Futures on Forex, Commodities, Cryptos, Indices, Interest Rates WebTrader, App CFTC, NFA
Firstrade logo
$0 Stocks, ETFs, Options, Mutual Funds, Bonds, Cryptos, Fixed Own SEC, FINRA

OANDA US

"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."

Jemma Grist, Reviewer

OANDA US Quick Facts

Demo AccountYes
InstrumentsForex, Crypto with Paxos (Cryptocurrencies are offered through Paxos. Paxos is a separate legal entity from OANDA)
RegulatorNFA, CFTC
PlatformsOANDA Trade, MT4, TradingView, AutoChartist
Minimum Deposit$0
Minimum Trade0.01 Lots
Leverage1:50
Account CurrenciesUSD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD

Pros

  • Seasoned day traders can access industry-leading tools, including an MT4 premium upgrade and advanced charting provided by MotiveWave
  • The broker offers a transparent pricing structure with no hidden charges
  • The proprietary OANDA web platform continues to deliver a highly competitive charting environment, including 65+ technical indicators powered by TradingView

Cons

  • The range of day trading markets is limited to forex and cryptos only
  • There's only a small range of payment methods available, with no e-wallets supported
  • It's a shame that customer support is not available on weekends

IG

"IG continues to provide a comprehensive package with an intuitive web platform and best-in-class education for beginners, plus advanced charting tools, real-time data, and fast execution speeds for experienced day traders."

Christian Harris, Reviewer

IG Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting
RegulatorFCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB
PlatformsWeb, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral
Minimum Deposit$0
Minimum Trade0.01 Lots
Leverage1:30 (Retail), 1:250 (Pro)
Account CurrenciesUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD

Pros

  • The ProRealTime advanced charting platform is free as long as certain modest monthly trading activity requirements are met
  • The proprietary web-based platform continues to caters to traders of all levels, with advanced charting tools and real-time market data useful for day trading
  • The IG app offers a superb mobile trading experience with a clean design that helped it secure Runner Up at our Best Trading App award

Cons

  • Beginners might find IG’s fee structure complex, with various fees for different types of trades or services, potentially leading to confusion or unexpected charges
  • Stock and CFD spreads still trail the cheapest brokers like CMC Markets based on tests
  • While there is negative balance protection in the UK and EU, there is no account protection or guaranteed stop losses for US clients

Plus500 US

"Plus500 US stands out as an excellent choice for beginners, offering a very user-friendly platform, low day trading margins, and access to the Futures Academy to enhance trading skills."

Michael MacKenzie, Reviewer

Plus500 US Quick Facts

Bonus OfferWelcome Deposit Bonus up to $200
Demo AccountYes
InstrumentsFutures on Forex, Commodities, Cryptos, Indices, Interest Rates
RegulatorCFTC, NFA
PlatformsWebTrader, App
Minimum Deposit$100
Minimum Trade0.0 Lots
Account CurrenciesUSD

Pros

  • Plus500 is a publicly traded company with a good reputation, over 24 million traders, and a sponsor of the Chicago Bulls, instilling a sense of trust
  • Plus500 US excels for its low fees with very competitive day trading margins and no inactivity fees, live data fees, routing fees, or platform fees
  • The Futures Academy is an excellent resource for new traders with engaging videos and easy-to-follow articles, while the unlimited demo account is great for testing strategies

Cons

  • Although support response times were fast during tests, there is no telephone assistance
  • Despite competitive pricing, Plus500 US lacks a discount program for high-volume day traders, a scheme found at brokers like Interactive Brokers
  • Plus500 US does not offer social trading capabilities, a feature available at alternatives like eToro US which could strengthen its offering for aspiring traders

Firstrade

"We recommend Firstrade for beginner investors looking to trade US stocks with no commissions. There is a wealth of free education plus premium-quality research and trading ideas from Morningstar, Briefing.com, Zacks and Benzinga."

William Berg, Reviewer

Firstrade Quick Facts

Bonus OfferDeposit Bonus Up To $4000
Demo AccountNo
InstrumentsStocks, ETFs, Options, Mutual Funds, Bonds, Cryptos, Fixed
RegulatorSEC, FINRA
PlatformsOwn
Minimum Deposit$0
Minimum Trade$1
Account CurrenciesUSD

Pros

  • Access to education, research, and tools
  • Accepts US traders
  • Commission-free investing

Cons

  • No copy trading
  • Visa Credit/debit card deposits and withdrawals not accepted
  • No 24/7 customer support

How Did We Choose The Best Market Maker Brokers?DayTrading.com broker testing methodology overview

The first and most important thing we checked is that the company is trusted.

The best indicator of a trustworthy broker is authorization from a creditable body, such as the Securities and Exchange Commission in the US or the Financial Conduct Authority in the UK.

This will help safeguard your capital, ensure you are receiving a high level of customer care, and reduce the risk of falling victim to conflicts of interest.

Following that:

  • We evaluated the market maker broker’s costs in the form of bid/ask spreads, commissions and additional fees.
  • We looked for companies that are transparent about their operations and pricing structure.
  • We looked for brokers with a wide selection of assets and securities, ensuring you’ll have a range of opportunities and the ability to build a diverse portfolio.
  • We tested the broker’s trading platform to make sure it’s enjoyable to use and that you can enter and exit positions quickly and easily.
  • We selected brokers with helpful features for short-term traders, including technical analysis tools, trading guides and mobile apps that facilitate trading ‘on the go’
  • We prioritized market maker brokers with excellent customer support based on our hands-on tests that consider the speed and quality of assistance.
  • We investigated the amount of borrowed funds, known as leverage, that you can use to trade, as this can play an important role in day trading strategies.
💡
Using leverage can supercharge a day trader’s profits, but when markets move in the wrong direction losses can also accelerate. Therefore, new traders should avoid using large amounts of borrowed money, or sidestep it altogether.

Understanding Market Makers

Market makers play an essential part in trading that takes place on regulated financial exchanges. They act as the middleman between buyers and sellers of financial securities, and continuously quote prices during market hours, thus ensuring that a trade can always be executed.

The deep liquidity that these institutions provide is critical for financial markets. It allows assets to be purchased and offloaded without causing substantial price turbulence.

Furthermore, their presence ensures that short-term traders, such as day traders, can open and close positions more easily.

Market makers also act as the middlemen in over-the-counter trading, where buyers and sellers do business outside of a financial exchange.

Importantly, market makers are not the same as brokerages. While brokers bring buyers and sellers together and pass orders onto third-party liquidity providers, market makers create the marketplace for investors by buying and selling assets directly to and from them.

However, financial institutions can act as both market makers and brokers. Trading with one of these dual-role entities carries advantages for short-term traders, though you should be aware of potential conflicts of interest that may arise.

Notably, market maker brokers may have an inherent conflict of interest as they often take positions opposite to their clients, potentially profiting from client losses. They also control prices and execution, which can lead to practices like price manipulation and less favorable execution for traders.

Strict regulation means that these companies must establish robust procedures and systems to avert any such conflicts.

These include setting up Chinese walls (barriers between different divisions), establishing strict order routing rules, and conducting regular internal audits.

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Royston Wild
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How Do Market Makers Work?

These institutions anticipate executing high volumes of buy and sell orders each day. And so they hold large inventories of assets, such as stocks, commodities, currencies and bonds, that they stand ready to trade from.

This function means that markets can keep moving by guaranteeing that a buyer and a seller can always find someone to do business with.

When markets are ‘illiquid,’ an investor may have difficulties locating another to make a trade. In these situations, the spread – in other words, the difference between the buy (or bid) and sell (or ask) prices – can be exceptionally high, resulting in greater costs to the trader.

How Do Market Maker Brokers Make Money?

Market-making brokers primarily generate profits through the bid/ask spread. They seek to buy at a lower bid price and sell at the higher ask price, and bank the difference in the process.

These institutions are still able to make money when liquidity is healthy and bid-ask spreads are kept to a minimum.

Whilst margins are small, the colossal volume of trades that are placed each day enables them to make a tidy profit.

Example trading fee at market maker broker CMC Markets
CMC Markets – The bid/ask spread on trading Legal & General shares

Certain market makers will also charge fees or commissions to execute trades. However, a high level of competition means that these costs – along with the difference between bid and ask prices – do not become prohibitive for traders.

Even if a market maker charges a trading fee, this can often be lower than that imposed by other brokers (like agency brokers).

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Royston Wild
Author

Example Trade

Let’s say that I wish to trade shares in Colin’s Computers using a market maker broker. I believe prices of the company will rise in price, and decide to buy 100 shares in the business to capitalize on this. The company currently trades at $50 per share.

To begin with, I’ll have a look at the bid and ask prices on my market-making broker’s trading platform. They are listed as:

This results in a bid/ask spread of $0.20.

When I place my buy order for 100 Colin’s Computers shares, the brokerage will match my instruction with existing sell orders on the market. If there is a seller who’s happy to offload their shares at $50.10, my order will be executed at this price.

In this case, how much profit would the market maker receive?

First off, let’s have a look at the total cost of the trade to me. This stands at $5,010 ($50.10 x 100 shares).

Now let’s assume that the market maker initially bought those shares for their inventory at the lower price of $49.90 each. Their profit would come in at $20 (the bid/ask spread of $0.20 x 100 shares).

Bottom Line

Deep liquidity is the key to straightforward and cost-effective trading. And by using market-making brokers, traders can enjoy an optimal dealing experience and improve their chances of making a profit.

However, using one of these brokerages to trade also presents risks that individuals need to be constantly mindful of. That’s why we recommend choosing one of our top-rated market maker brokers.

FAQ

What Is A Market Maker?

A market maker is a firm or broker that provides bids and offers of a two-sided market along with the market size of each. By trading on both sides of the market, these companies provide a platform for trading, making their money through spreads.

Do Market Maker Brokers Manipulate Prices?

Market maker brokers set their own bid/ask prices, which makes it possible for them to manipulate asset prices. However, competition is so stiff that spreads offered by market makers are generally tight.

Finding a market maker broker that is registered with a respected authority will help prevent you from being scammed or manipulated.

Do Market Maker Brokers Own Stock?

A market maker will buy stock from you and hold it until it finds another buyer. During this time, the broker does own that stock. However, they do not hold shares for their own benefit.

What Are The Advantages Of Trading With A Market Maker Broker?

Market maker brokers with healthy liquidity allow traders to enter and exit positions rapidly, thus enabling you to swiftly capitalize on trading opportunities that arise. This also helps reduce the threat of slippage, where the expected and actual prices of a trade differ due to timing issues.

Many of these brokers also offer fixed spreads, which appeal to beginners especially, providing a clear picture of how much a trade will cost.

What Are The Risks Of Trading With A Market Maker Broker?

While their operations are often closely observed by regulators, the potential for market-making brokers to act in their own interests at the expense of traders is always present.

Also, market makers may not provide the same level of price transparency as other brokers, such as electronic communication network (ECN) brokers.

Additionally, with ECN brokers, it is possible to trade prices at certain times with little or no spread. This means day traders can often get better prices with these companies than with market makers.