IC Markets steps into prop trading with ICFunded

Sydney-based IC Markets, an online provider of FX services and ECN trading capabilities, is expanding its offerings by preparing to enter the prop trading arena.

According to tradeinformer, this move has now come to fruition with the soft launch of its new platform, ICFunded.com. Currently available in Beta mode, the platform marks IC Markets’ entry into the competitive space of proprietary trading, where traders are given funds to trade on behalf of the firm.

ICFunded.com is open for clients to sign up and explore the functionalities of the platform, albeit in a trial phase. TradeInformer has learned that the product has been operational for over a week and has garnered strong interest, especially from IC Markets‘ existing clientele.

IC Markets is not alone in this venture. The brokerage is part of a growing list of firms that have launched a prop firm or funded trader program. Notable names in the industry such as Axi, Oanda, and Hantec Markets have already embarked on similar paths, alongside smaller entities like Raise FX and YaMarkets.

The sector, however, navigates a regulatory landscape that could be best described as a grey area. Most prop trading offerings, including that of IC Markets through ICFunded.com, predominantly feature demo accounts. These accounts, designed for training and strategy testing purposes, are not subject to regulatory oversight in any jurisdiction, as far as current information allows.

By establishing prop trading firms, FX brokers diversify their revenue sources. Traditionally reliant on spreads and commissions, brokers can now also profit directly from successful trades executed by their proprietary traders. This not only boosts the firm’s income but also reduces its dependency on traditional revenue models subject to market volatility and competitive pressures.

A prop trading arm offers brokers better control over their risk exposure. It provides a mechanism to hedge against client positions or to manage the firm’s exposure to market fluctuations more strategically. This can lead to a more stable financial performance, even in volatile markets, by balancing risks through internal trading activities.