Good spreads for trading USD/MXN?

[traderbee]

Anyone know where one can find good spreads for trading USD/MXN?

Most brokers have it as an "exotic" pair....(????)...with very wide spreads....

 

[Pharaoh]

Think of it this way. Brokers based in New Zealand (really based there, not just getting a quick and easy "regulation" there) tend to have much lower spreads on NZD pairs than brokers in Europe or the US.

If you can find a broker based in Mexico, I don't know how well regulated it would be, but it would probably have better MXN rates.

Since the US is Mexico's largest trading partner, US brokers should hypothetically offer better spreads for MXN pairs than European or other brokers.

 

[traderbee]

Think of it this way. Brokers based in New Zealand (really based there, not just getting a quick and easy "regulation" there) tend to have much lower spreads on NZD pairs than brokers in Europe or the US.

If you can find a broker based in Mexico, I don't know how well regulated it would be, but it would probably have better MXN rates.

Since the US is Mexico's largest trading partner, US brokers should hypothetically offer better spreads for MXN pairs than European or other brokers.

Hi Pharaoh, indeed, that's what I was looking for but unfortunately, I have not been able to find local Mexican fx brokers...if anyone does know, please post it on this thread

The lowest spread I could find from a us broker is fxcm with 47 pips.

 

[Pharaoh]

I think your best bet may be to pick a US broker. Even if the spread is wider, if something goes wrong, you've got the NFA and CFTC ready to step in and deal with the situation. A Mexican broker (if there is one) might offer great spreads, but I would worry about the qualify (or even existence) of firm regulation.

 

[Jason Rogers]

The lowest spread I could find from a us broker is fxcm with 47 pips.

Hi Traderbee,

Something to keep in mind is that a 47 pip spread on USD/MXN is not the same as a 47 pip spread on EUR/USD. Since MXN is the counter currency of the USD/MXN currency pair, the pip cost is considerably less than for EUR/USD where USD is the counter currency.

Specifically, when you trade one standard lot (100K) of EUR/USD, the pip cost is $10.00. By contrast, when you trade 100K USD/MXN, the pip cost is only $0.49 or 49 cents base on the current USD/MXN exchange rate of 20.51480.

With FXCM, you can place trades as small as one micro lot (1K), where the pip cost for EUR/USD is 10 cents and the pip cost for USD/MXN is 0.49 cents or less than half a cent. On this trade size, a 47 pip spread equates to less than 23 cents.

To summarize, if the USD/MXN spread is 47 pips, then you pay less than 23 cents in spread cost on a micro lot (1K) trade. You can test this out for yourself on one of our demo accounts.

 

[traderbee]

Hi Traderbee,

Something to keep in mind is that a 47 pip spread on USD/MXN is not the same as a 47 pip spread on EUR/USD. Since MXN is the counter currency of the USD/MXN currency pair, the pip cost is considerably less than for EUR/USD where USD is the counter currency.

Specifically, when you trade one standard lot (100K) of EUR/USD, the pip cost is $10.00. By contrast, when you trade 100K USD/MXN, the pip cost is only $0.49 or 49 cents base on the current USD/MXN exchange rate of 20.51480.

With FXCM, you can place trades as small as one micro lot (1K), where the pip cost for EUR/USD is 10 cents and the pip cost for USD/MXN is 0.49 cents or less than half a cent. On this trade size, a 47 pip spread equates to less than 23 cents.

To summarize, if the USD/MXN spread is 47 pips, then you pay less than 23 cents in spread cost on a micro lot (1K) trade. You can test this out for yourself on one of our demo accounts.

Thanks for the info Jason, will check it out

 

[Pharaoh]

And then FXCM begins its withdrawal from the US.