Would you be surprised if I tell you that there are only a handful of off-shore forex brokers that accept US clients? The country with the biggest economy in the World, the leading advocate of the free market economy and the one that houses Wall Street, is really strict and careful when it comes to the derivatives markets, especially investing in leveraged foreign exchange.
Glad that I am not US citizen or residing there. Mind that the law applies not only to US citizens but also to residents.
Why don’t many brokers accept US traders?
After the big US banks went bust at the height of the financial crisis in 2008 – 2009, watchdogs like CFTC, SEC and NFA decided to tighten the screws in financial sector as a solution to moral hazard problem. Leveraged products got its lion share on these new stricter financial rules and forex was one of those scapegoats.
Thanks to those stricter rules, the leverage is lower compared to other jurisdictions and required capital to operate in the USD is much higher compared to its peers. Thus profit prospects are not that attractive and we don’t see a lot of forex brokers based in the USD.
Brokers that Accept US Clients
Only a Handful of Forex Brokers
However, the market is still there. Investors from the US are looking for higher leverage, tighter spreads, free bonuses etc… On the other hand, only few forex brokers are willing to open forex trading accounts for US clients.
Forex.com is one of the few forex brokers that accept clients from the US. The brand is owned and operated by an industry giant; GAIN Capital Holdings who has been around for more than 20 years. The important point is that Forex.com is headquartered and regulated by CFTC and NFA in the US which means that Forex.com is not an off-shore entity. I would recommend Forex.com for all my followers who are residents of the US. It is a reliable and customer oriented forex broker.
FXChoice opens account for investors who are residents of the US as well. FXChoice is founded in 2010, located in Belize and regulated by Belize IFSC. Leverage is 200:1 and spreads are tight. They offer negative balance protection and allow automated trading systems. A wide range of deposit and withrawals methods and customer support in several languages are the other pros for FxChoice.
AAFX is also among those rare forex brokers accepting clients from the US. It is headquartered in Saint Vincent and the Grenadines and regulated by SVG FSA. The company is founded in 2013, so passes one of my criteria of being a reliable forex broker.
Negative balance protection feature should be noted as well. Not too many forex firms provide this feature. Those of you who have been trading since 2015 (SNB’s abrupt EURCHF 1.20 removal) would know the significance of Negative Balance Protection. Spreads are tight and they offer a lot of options in terms of deposit / withdrawing funds.