Brokers that allow arbitrage are brokers whose terms of business do not prohibit arbitrage strategies and whose execution model can handle them without cancelling trades or closing the account. There is no official list: policies change, and the same broker can treat different account types differently. The reliable way to find a suitable broker is to check three things yourself: the client agreement, the execution model (A-book, B-book or hybrid) and the actual execution quality on a live account.
Why many brokers restrict arbitrage
- B-book brokers lose directly: when the broker is the counterparty, every winning arbitrage trade is the broker’s loss. See B-book.
- A-book brokers cannot hedge stale prices: by the time the broker sends the trade to its liquidity provider, the price has already moved, and the provider may reject it through last look or penalise the broker for toxic flow.
- Price errors and delays: client agreements often treat trades on “off-market” or delayed prices as invalid.
This applies mostly to latency arbitrage. Other strategies, such as two-broker lock arbitrage or statistical arbitrage, are treated differently by different brokers.
How to check if a broker allows arbitrage: step by step
- Read the client agreement: search for the words “arbitrage”, “latency”, “abusive trading”, “price manipulation”, “off-market price”, “scalping” and “high-frequency”. Note what the broker may do: cancel trades, adjust prices, withhold profits or close the account.
- Read the order execution policy: check whether the broker acts as principal (market maker) or agent, whether it uses instant or market execution, and whether positive slippage is passed on to clients.
- Check regulation: brokers regulated by the FCA, CySEC, ASIC or other national regulators must have a written execution policy and handle conflicts of interest under rules such as MiFID II. Unregulated brokers have no such obligation.
- Ask support in writing: ask whether arbitrage, EAs and short holding times are allowed on your account type. Keep the answer.
- Test on a small live account: demo accounts often have different execution. Measure execution time, slippage and rejections on real trades, and build settings for this broker with a backtest (see below).
- Watch for changes: execution that suddenly worsens on one account may mean the broker has changed its settings for it.
Signs of an arbitrage-friendly vs restrictive broker
| Parameter | More suitable | Less suitable |
|---|---|---|
| Execution model | ECN/STP, market execution, direct market access | Dealing desk, instant execution with frequent requotes |
| Client agreement | No ban on arbitrage or EAs | Explicit ban on arbitrage, latency trading or “abusive” strategies |
| Slippage | Positive and negative slippage both passed on | Only negative slippage, see slippage |
| Execution time | Stable and low | High or increasing over time |
| Connectivity | FIX API or fast server in LD4/NY4 | Only a slow platform server |
| Anti-arbitrage tools | None observed | Virtual dealer plugins, fixed delays, wider spreads per account |
What regulators say
Regulators do not keep lists of brokers that allow arbitrage, and arbitrage by clients is not banned by MiFID II or ESMA rules. What regulators do require is fair treatment: firms must follow their order execution policy consistently and manage conflicts of interest. ESMA has stated that asymmetric slippage indicates a firm is not managing conflicts of interest, and the UK FCA and Poland’s KNF have fined brokers over asymmetric price handling. In practice, whether arbitrage is allowed is a contractual question, so the client agreement decides.
Test the broker and build a set with Westernpips BackTester
Reading the terms tells you whether arbitrage is allowed; only testing tells you whether it works at a particular broker. Conditions differ by broker, account type, symbol and even trading session, so settings that work at one broker rarely transfer unchanged to another. Westernpips Private 7 includes a BackTester that finds settings (a “set”) from quotes recorded at the broker you plan to trade:
- Record quotes: enable “Save Track to File” in the strategy and record the traded symbol for a full trading session, ideally at least 3 days. Trading permission is not needed for this step.
- Run trial trading: place a small number of real trades to see actual execution time, slippage and rejections at this broker.
- Prepare the backtest: load the recorded ticks into BackTester for the same strategy.
- Build the set: test parameters on the recorded data and choose the settings that fit this broker’s conditions.
- Read the result honestly: if you followed all steps and the set still does not work on the live account, the broker’s conditions most likely do not allow trading with an arbitrage system. Move on to another broker.
During live trading, Execution Control and Slippage Control pause trading automatically if execution worsens, which is often the first sign that a broker has changed its conditions. Connections are made through MetaTrader or FIX API connectors.
Verified Myfxbook monitoring of real accounts
Westernpips publishes trading statements and verified monitorings of live accounts traded with Westernpips Private 7. The page lists 144 Myfxbook and FX Blue monitorings from 2011 to 2026 at 29 different brokers, plus video statements. Myfxbook verifies the track record and trading privileges through read-only investor access to the broker account. These records show at which brokers the software has been traded in practice, but they are selected examples, not typical results, and a broker’s conditions can change after the monitoring period. Always test the broker yourself before trading.
FAQ about brokers and arbitrage
Is there a list of brokers that allow arbitrage?
Lists published online go out of date quickly, because brokers change their terms and execution settings. Verified monitorings, such as the Westernpips Myfxbook statements, show where arbitrage has actually been traded, but you should still check the current client agreement and test the broker with recorded quotes and a small live account.
Can a broker cancel arbitrage profits?
If the client agreement prohibits arbitrage or trading on delayed prices, the broker may cancel those trades under its terms. Regulated brokers must still follow their published policies and complaint procedures.
Do ECN brokers allow arbitrage?
ECN/STP brokers are usually more tolerant because they do not take the other side of client trades, but many still restrict latency arbitrage in their terms because their liquidity providers object to it.
Risk warning: Leveraged trading in Forex and CFDs can result in losses that exceed your initial expectations. Brokers may restrict, cancel or reprice trades under their terms of business, and past results do not guarantee future results. This article is for educational purposes only and is not investment advice.