Deriv vs XM: Who is the Better Broker?
When it comes to online trading and investing, selecting the right broker is arguably one of the most crucial decisions an individual can make. With the proliferation of trading platforms boasting a wide array of features, educational resources, and competitive spreads, traders are often faced with the daunting task of comparing platforms to identify which one aligns best with their goals.
Among the plethora of options available today, Deriv and XM stand out prominently, each boasting a strong reputation and loyal customer base. Both platforms cater to diverse traders—from beginners taking their first steps into the trading world, to seasoned professionals executing complex trades. Yet, their differences are significant enough to influence your trading success, comfort, and satisfaction.
In this comprehensive comparison, I’ll walk you through every critical aspect of Deriv vs XM—from trading instruments and platforms to regulatory status, customer support, and educational resources. By the end, you’ll have a clear idea of which broker might be better suited for your trading style and aspirations.
The Origins and Backgrounds of Deriv and XM
Deriv: A New Player with a Rich Heritage
Deriv, formerly known as Binary.com, traces its roots back to 2000. Over the years, it evolved from a binary options broker into a comprehensive trading platform offering a wide variety of financial instruments. Rebranded as Deriv in 2020, the platform emphasizes innovation, user-centric design, and broad accessibility.
The platform operates globally with a focus on providing seamless trading experiences across different devices, with particular attention to the needs of traders in emerging markets. Its commitment to transparency and regulatory compliance has helped it to build and sustain a trustworthy presence in the industry.
XM: A Veteran in Forex & CFD Trading
XM was founded in 2009 and has established itself as a globally recognized Forex and CFD broker. It is headquartered in Belize but operates under multiple regulatory licenses, including those in Australia and Cyprus, assuring traders of its compliance with international standards.
XM prides itself on its impressive educational initiatives, low spreads, and excellent customer support. It is particularly favored by traders who seek a robust Forex trading environment along with a broad range of CFD offerings.
Regulatory Status and Security Measures
Regulation plays a pivotal role in evaluating whether a broker is trustworthy. It affects trader protection, transparency, and operational integrity.
Deriv: Regulation and Compliance
Deriv is licensed and regulated by authorities such as the Malta Gaming Authority (MGA) and the Vanuatu Financial Services Commission (VFSV). However, it’s important to note that Deriv holds a gaming license rather than a financial services license in certain jurisdictions, which may impact traders in terms of regulatory protections.
While it adheres to strict know-your-customer (KYC) procedures, some traders consider its regulatory oversight less comprehensive compared to brokers regulated primarily for financial services.
XM: Regulation & Trader Protection
XM is licensed and regulated by reputable authorities, including the Australian Securities and Investments Commission (ASIC), the Cyprus Securities and Exchange Commission (CySEC), and the International Financial Services Commission (IFSC) of Belize.
This multi-jurisdictional licensing provides traders with a higher level of security. ASIC regulation, in particular, is seen as robust, and provides significant protections such as negative balance protection, segregated client accounts, and transparent financial disclosures.
Key takeaway: XM’s active regulation by multiple reputable authorities generally makes it a safer choice for traders prioritizing security and compliance.
Trading Instruments and Product Offerings
Range of Trading Instruments
Deriv offers a diversified portfolio primarily centered around:
- Forex currency pairs
- CFDs on stocks, commodities, and indices
- Synthetic indices (popular for markets with no physical counterpart)
- Cryptocurrencies
XM, on the other hand, provides:
- Over 55 Forex currency pairs
- CFDs on commodities, indices, metals
- Energies
- Cryptocurrencies (though more limited compared to Deriv)
Comparison Summary:
| Feature | Deriv | XM |
|---|---|---|
| Forex Pairs | Yes (extensive selection) | Yes (over 50 pairs) |
| CFDs on Stocks | Yes | Yes |
| CFDs on Commodities & Metals | Yes | Yes |
| Synthetic Indices | Yes | No |
| Cryptocurrencies | Yes | Yes |
| Energies | Limited | Yes |
Implication: If trading synthetic indices and a broader array of cryptocurrencies is a priority, then Deriv has an edge. For traders focused on Forex and traditional CFDs, both platforms are comparable.
Trading Platforms and User Experience
Deriv’s Platform Options
Deriv offers multiple trading interfaces tailored to different trading styles:
- Deriv MT5: Popular for its all-in-one access, compatibility with Expert Advisors (EAs), and advanced charting.
- Deriv Web Platform: Browser-based, no downloads required, optimized for simplicity.
- Deriv Mobile App: Available on iOS and Android, ensuring trading on the go.
- Deriv’s Proprietary Platform: Designed specifically for synthetic indices and binary options, with a straightforward interface.
XM’s Trading Platforms
XM primarily offers:
- MetaTrader 4 (MT4): Industry-standard platform, renowned for its user-friendly interface, EA compatibility, and custom indicators.
- MetaTrader 5 (MT5): Advanced version supporting more asset classes, order types, and analytical tools.
- WebTrader: Browser-based platform with basic features.
- Mobile Apps: Fully functional apps for both MT4 and MT5.
Platform Comparison
| Aspect | Deriv | XM |
|---|---|---|
| Platform Diversity | Multiple including proprietary, MT5, mobile apps | MT4, MT5, WebTrader, Mobile Apps |
| User-Friendliness | Intuitive, especially for synthetic indices | Also highly user-friendly, especially for Forex traders |
| Advanced Tools | Available via MT5, proprietary features | Extensive charting, EAs support via MT4 & MT5 |
| Customization | Custom indicators and strategies supported | High, especially on MT4/MT5 |
Takeaway: Both broker platforms are robust, with XM leaning heavily on MetaTrader’s extensive features, appealing heavily to advanced traders. Deriv’s proprietary interface can be more straightforward for beginners, especially for synthetic indices.
Spreads, Commissions, and Costs
Spreads and Trading Fees
-
Deriv: Offers fixed and variable spreads depending on the asset. Synthetic indices often feature fixed spreads, with some assets having low spreads (sometimes as low as 0.1 pips). For binary options, fixed payout structures are standard.
-
XM: Known for tight spreads, especially on major Forex pairs, averaging 0.1 to 1 pip for EUR/USD. Commission-based accounts on MT4/MT5 have a small per-trade fee, while other accounts have zero commissions but slightly higher spreads.
Swap and Overnight Fees
- Deriv: Swap rates are generally transparent and competitive.
- XM: Offers swap-free accounts, aligning with Islamic finance principles, which is a significant advantage for Muslim traders.
Cost Summary
| Feature | Deriv | XM |
|---|---|---|
| Typical Forex Spreads | Fixed: ~1.0 pip on majors; variable at times | As low as 0.1 pip on majors |
| Commissions | Mostly zero; some accounts may have fixed fees | Variable, depending on account type |
| Swap/Overnight Fees | Competitive, transparent | Available, with swap-free options |
Insight: Traders seeking lower spreads and low-cost trading might prefer XM, especially with its ECN-like accounts. Deriv’s fixed spreads are suitable for traders who prefer predictability.
Account Types and Minimum Deposits
Deriv
- Standard Accounts: Offer fixed spreads, no commissions, with a minimum deposit of as low as $5.
- Advanced Accounts: Variable spreads and some account-specific features.
- Specialized Accounts: For synthetic indices and binary options, suited for traders with specific interests.
XM
- Micro Accounts: Minimum deposit as low as $5, suitable for beginners.
- Standard Accounts: No commission, tight spreads, suitable for most traders.
- Zero Accounts: Commission-based, spreads as low as 0.1 pip.
- Islamic Accounts: Swap-free.
Comparative Overview
| Aspect | Deriv | XM |
|---|---|---|
| Minimum Deposit | $5 | $5 |
| Account Types | Standard, advanced, synthetic indices | Micro, Standard, Zero, Islamic |
| Ease of Account Setup | Very straightforward | Very straightforward |
Leverage and Risk Management
Leverage Offered
- Deriv: Offers leverage up to 1:100 on Forex assets, but it varies based on the asset class and jurisdiction.
- XM: Provides leverage up to 1:30 for retail clients in the US and Europe, but can be as high as 1:888 in certain jurisdictions for professional traders.
Risk Considerations
High leverage can amplify returns but also significantly increases risk. Both brokers provide risk management tools such as stop-loss and take-profit orders, essential for protecting your capital.
Note: US traders are limited in leverage due to regulatory restrictions, and both brokers may have restrictions on US clients.
Customer Support and Educational Resources
Customer Support
Deriv offers support via live chat, email, and telephone, with availability depending on regional regulations. Their response times are generally prompt, and support is available 24/7 in many regions.
XM is renowned for its excellent customer service, available 24/5 through live chat, email, and phone. They are often praised for their multilingual support team.
Educational Resources
Both brokers invest heavily in trader education:
- Deriv: Offers tutorials, webinars, and an active blog focusing on trading strategies, platform tutorials, and market insights.
- XM: Provides extensive educational materials, including video tutorials, articles, webinars, and trading guides. XM’s education section is comprehensive, especially for beginners.
Summary: Astute traders seeking continual learning may prefer XM’s educational offerings, though Deriv’s resources are more geared toward synthetic indices and binary options.
Promotions and Bonuses
Deriv
Offers demo accounts and occasional promotions but generally refrains from aggressive bonuses, aligning with transparency standards.
XM
Features a welcome bonus for new traders, deposit bonuses, and loyalty programs. However, all bonuses are subject to strict withdrawal conditions.
Note: Always scrutinize promotional offers, as some can be misleading or impose restrictive terms.
Withdrawal and Deposit Methods
Payment Options
Deriv: Accepts bank transfer, credit/debit cards, e-wallets like Skrill and Neteller, limited cryptocurrency options.
XM: Broad deposit and withdrawal options including wire transfer, credit/debit cards, e-wallets, and cryptocurrencies in select regions.
Processing Times
- Deriv: Withdrawals generally processed within 24 hours.
- XM: Withdrawals processed swiftly—often same day—subject to banking hours.
Key Point: Transparent and swift withdrawal processing is critical. Both platforms demonstrate good commitment here, but XM’s wide variety and faster processing times may have an edge.
Demo Accounts and User Accessibility
Both brokers support free demo accounts for practice trading, which are essential for beginners.
- Deriv: Offers a risk-free demo account with virtual funds, accessible immediately upon registration.
- XM: Provides a demo account with $50,000 virtual funds, available for a 30-day trial period, with an option to extend upon request.
Final Verdict: Who is the Better Broker?
After an exhaustive comparison, the choice between Deriv and XM hinges on individual trading needs, risk appetite, and personal preferences.
Key Strengths of Deriv
- Innovative product offerings like synthetic indices and binary options
- User-friendly platform interfaces, especially for beginners
- Fixed spreads, predictable trading costs
- Suitable for traders interested in diversified asset classes beyond traditional forex trading
Key Strengths of XM
- Strong regulatory background providing enhanced safety
- Tight spreads and low commissions, ideal for cost-conscious traders
- Extensive educational resources catering to beginners and advanced traders alike
- Broad asset offerings including forex, CFDs, metals, energies, and cryptocurrencies
Who Should Choose Deriv?
If you are a trader keen on synthetic indices, binary options, or want an intuitive platform designed for easy navigation, Deriv is a compelling choice. Its focus on innovation and accessibility makes it suitable for beginners and traders interested in diverse instruments.
Who Should Choose XM?
For traders who prioritize a regulated environment, tight spreads, comprehensive educational tools, and a wider array of traditional forex offerings, XM is an excellent choice. Its robust platform capabilities and reputation make it suitable for both beginners eager to learn and experienced traders seeking competitive costs.
Frequently Asked Questions (FAQs)
1. Is Deriv regulated by any financial authority?
Deriv is regulated by authorities such as the Malta Gaming Authority and Vanuatu Financial Services Commission. However, it is important to note that its primary licensing is gaming-related, which might offer different levels of protections compared to financial regulators.
2. Is XM a safe broker for US traders?
No, XM does not accept US traders due to regulatory restrictions. US traders should seek brokers compliant with the CFTC and NFA regulations.
3. Which broker offers better trading conditions: spreads, commissions, or leverage?
XM generally offers tighter spreads, especially on major forex pairs, and has lower commissions on ECN accounts. Leverage varies based on jurisdiction, but XM generally provides higher leverage options than Deriv.
4. Can I trade cryptocurrencies on both platforms?
Yes, both brokers offer cryptocurrency trading, but Deriv provides a wider selection including synthetic indices linked to crypto markets.
5. What about customer support and educational resources?
Both brokers provide robust support and educational content, but XM is often rated slightly higher for its multilingual 24/5 support and extensive educational program.
6. Are demo accounts available?
Yes, both platforms offer free demo accounts to practice before risking real money.
7. Which broker is more suitable for beginners?
Deriv’s simplified platform and product offerings make it attractive for beginners. XM’s comprehensive educational resources also support new traders well.
8. What deposit and withdrawal options do they support?
Both brokers support bank transfers, credit/debit cards, and e-wallets. XM additionally accepts cryptocurrencies in some regions.
Conclusion
Choosing between Deriv and XM ultimately depends on your trading style, risk tolerance, and what features you prioritize in a broker. Both are reputable platforms, each with their unique advantages. Taking the time to assess your needs against what each offers will help you make an informed decision—and set you on a more confident path toward your trading or investing goals.