In-Depth XS.com Review: Why Liquidity Provider is a Better Broker For Retail Traders

Liquidity provider as a broker

XS.com, for anyone new to the scene, is an established broker, founded in 2010 in Australia. It has a unique feature in that initially it started as a liquidity provider, serving other brokers and large financial organizations, before eventually settling on the broker role itself.

These roots are quite visible still: XS.com is happy to serve as a liquidity solution to large enough organizations. For a retail trader, this matters for 2 main reasons:

1. The broker is trusted enough to have other companies reach out to it, and has a stable enough service and ample funds even for them. If large institutions are entrusting tens of millions of dollars to XS.com, it’s unlikely the broker will be mishandling any sums from regular retail traders.
2. There is unlikely to be a liquidity crunch. Typically, with smaller brokers even a retail trader can experience slippages if trading big lots on less-than-popular forex pairs. XS.com allows for up to 2000:1 leverage on majors, and yet the shortage of liquidity is unlikely to happen even with the biggest lots.

A deep liquidity pool is only part of the draw here, however. XS.com also provides tailored guidance & support for its clients, and that extends to retail traders. However, to experience in full everything that the broker is capable of, the trader is expected to get a VIP account, which has a minimum deposit of 100 000 USD. There are other account options, such as Elite account (minimum 500 USD) and Standard account (no minimum deposit requirements), but these do not get exclusive treatment.

The amusing thing is, you may have traded with XS.com without realizing it. That is because of FIX API, which allows other companies to create custom brokerage solutions on top of XS.com liquidity.

They offer a “Start your own broker” package that is an easy integration for any corporate clients. They can operate as a fully autonomous broker and provide their clients with thousands of assets available through XS.com. They get tier-1 liquidity pools, trading system, CRM, and full back-end module, as well as technical support. They don’t get XS.com’s brokerage license, however, and need to work on that for themselves. But XS.com provides them with guidance and support to achieve those results (XS.com has five of those brokerage licenses from all over the world, including Africa, Asia, and Europe, so my guess is they likely know what they are talking about).

So you may have traded with one of the brokers that works through XS.com already. My question here is: why not go for the source?

I see, again, two straightforward reasons why XS.com is straight-up better than many brokers that are built on top of it:

1. XS.com will undoubtedly have more regulations behind it, more licenses and more protection for clients, including clients with millions of dollars in trading deposits.
2. On top of that, fees while trading directly through the liquidity provider are significantly less than having a provider + a broker/brand fee on top of it.

XS.com reviews seem to echo that fact, as it has “excellent” rating (4.4 out of 5 stars) on Trustpilot, as well as 4.54 out of 5 stars on Reviews.io, with 96% of users recommending it for new clients, often citing very low commissions for traders. Many of these reviews come from Malaysia, Japan, and even South Africa, establishing that XS.com has a global presence, and its lower fees are noticed and appreciated in many parts of the world.

There is, however, one downside of having an ex-liquidity provider as a broker for retail traders. It’s quite an obvious one. As it has clients with millions of dollars in deposits, it isn’t as reliant on smaller deposits to keep its business operations secure. Therefore, there is a temptation to focus all customer support on higher net worth clients, and corporate institutions, to the detriment of regular small-time traders.

With XS.com, this doesn’t seem to be the case, at least so far. XS.com reviews often mention quality help from the customer support team, and are thankful for the attentiveness to their needs (you can check the links above for a more detailed look). So this doesn’t seem to be a significant concern, at least for now.