London Capital Group (LCG) is a UK-based brokerage that offers trading in a variety of instruments. The forex pairs available for trading are over 60, in LCG’s own words, including major, minor and exotic pairs. There are also CFD contracts across a wide range of asset classes, including shares, indices, spot metals, futures, bonds and interest rates. LCG clients can also trade on other markets like spot metals, commodities, vanilla options, etc.
The forex pairs portfolio is comparable to that of other FCA-regulated forex brokers like FxPro, which offers around 70 forex pairs, while FXCM, for example, has a more limited portfolio of around around 40 pairs.
The Company. Security of Funds
Company Country Regulation
London Capital Group UK FCA
London Capital Group was incorporated in 2005 and is publicly traded on the London Stock Exchange. Its core activity includes spread betting (in the UK), trading in forex and CFDs to private, retail and professional clients. The company also offers Introducing Broker and White Label solutions.
LCG is regulated by UK’s Financial Conduct Authority (FCA) – the regulator of one of the major financial markets of the world. The watchdog has strict rules and requirements on company capital, client funds segregation and on a whole lot of other things. This places the brokerages regulated by it among the most reputable and stable in the world. Other major forex brokers with an FCA license are FXCM, XM, FxPro, Forex.com, IG Group, CMC Markets, Plus500, etc.
LCG offers to main types of live trading accounts: Classic and ECN. The main difference between them is the spreads, with the ECN accounts having much tighter spreads. LCG also provides the option of a premium service for traders with at least £25 000 on deposit. It includes personalized service, analysis and instruments.
There is also an Islamic account, also known as swap-free account, because it implies no rollover interest on overnight positions. The feature is popular among brokers seeking to expand their presence in markets with predominantly Muslim population observing the sharia law, which explicitly forbids profiting from interests and usury. Other brokers offering Islamic accounts are Grand Capital, FXTM, XM, FxPro, Admiral Markets, etc.
LCG also offers a free demo account.
LCG says it does not have a minimum deposit requirement for the opening of a live trading account, provided the client deposits enough funds to cover the margin requirements for the markets they are trading. This sounds like a rather reasonable condition, even though LCG offers leverage of up to 1:500 on some forex pairs, which can be somewhat dangerous for inexperienced traders. On the other hand, however, it is expected that the FCA will soon introduce a 1:50 leverage cap on CFDs for the brokers under its supervision.
In order to qualify for an ECN account, LCG clients must maintain an $10 000 account balance, which suggests this service is aimed at larger retail and the institutional traders.
Spreads & Commissions
LCG has floating spreads for both the Classic and the ECN accounts. The average spread on the most popular forex pair, EURUSD on the Classic account, is 1.6 pips, which is around the average for the floating spreads. The highest average on a major pair is 2.6 pips for GBPJPY.
The spreads for ECN accounts are much tighter, starting from 0 pips. The average spread on the EURUSD pair is 0.2 pips, while on GBPJPY it is 1.6 pips.
As most brokers, LCG charges a commission on the accounts with tighter spreads. According to its site, there are two types of commissions, depending on the trading platform used. For trading on MetaTrader 4 (MT4) LCG charges $10 per lot. For trading on the proprietary LCG Trader, the commission is $45 per $1,000,000 traded.
The maximum leverage LCG offers is 1:500 for Classic accounts on most major pairs, except EURCHF and USDCHF, where the leverage is 1:50, as it is for all exotic pairs. For minor pairs the max leverage is 1:200.
On ECN accounts the max leverage is 1:200 for major and minor pairs and 1:50 for exotics.
LCG offers two trading platforms: the ever popular MT4 and LCG Trader, which is cTrader – a platform whose developer offers it for branding under a white label partnership. Another popular broker that offers cTrader is FxPro.
The MT4 is available for both types of live trading accounts, while the LCG Trader is intended for ECN accounts only.
The LCG Trader is web-based and enables clients to trade in all 5000 instruments across seven asset classes the broker offers. The platform provides low latency, deep liquidity, fast execution and optimized prices.
Most good brokers like FXCM offer a platform developed specifically for or by them, which usually caters to the needs of the more professional traders. Additionally they provide one of the popular options like the MetaTrader 4 and or 5, with which even the smaller retail traders are familiar.
Methods of payment
LCG accepts client deposits through bank transfer, debit/credit cards and the online payment service Skrill. The broker note it does not accept some types of Visa Electron debit cards.
LCG is a long established major UK forex and CFD broker. It is regulated by the FCA and is listed on the London Stock Exchange, which implies it is a good and stable company. Obviously the broker does not make the bulk of its profits from small retail traders, but, nevertheless, offers rather decent conditions for them too.
LCG’s average spreads for the Classic accounts, the high leverage and the flexible approach towards deposit requirements makes it rather attractive for the average retail trader. The broker does not try to attract everybody with lucrative bonus programs (with all the strings attached) and all sorts of useless bells and whistles, but rather is appealing to those who know what they need. The fact that LCG offers MT4 also makes it attractive for a wider client base.
Overall, LCG looks like a very good option for those who are looking for a stable regulated broker with decent trading conditions. The FCA regulation means the broker can offer its services throughout the EEA (EU + Iceland, Norway and Lichtenstein).
LCG Review Conclusion
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