When you research arbitrage in overseas forex trading, you'll often come across descriptions like "you can accumulate profits with low risk" or "this broker is usable."However, if you actually open and read the broker's terms of service, you'll find that they say something completely different.
This article examines the original terms of service of eight overseas forex brokers and organizes how arbitrage is defined, including clause numbers . Furthermore, it explains what actually happens if arbitrage is detected , based on the clauses of the terms
Conclusion | How Arbitrage is Treated Under the Terms and Conditions of Overseas Forex Trading (as of September 2026)
- Of the eight companies whose terms and conditions we were able to confirm, seven had a clause prohibiting arbitrage.The remaining company's terms and conditions did not contain this clause in the main text of their terms, but it was included in their campaign terms and conditions.
- HFMThe title of Article 7 of is "Arbitrage." It clearly states, " We do not permit arbitrage on our trading platform. "
- In Section 55.3, XMTrading defines arbitrage, sniping, and scalping collectively as "illegal trading methods."
- The measures are not limited to just canceling transactions. There are also clauses that include closing all trading accounts, forfeiting profits, prohibiting the opening of new accounts, and even transferring funds from other accounts to offset losses without applying zero-cut protection.
- The practice of "seeking risk-free profits through hedging" is also explicitly prohibited. HFM" lists trading that aims for risk-free profits by taking opposing positions " as a prohibited trading practice
- It's not illegal, but it is a breach of contract.While it's not subject to criminal penalties, you could lose your account for violating the terms and conditions. These two things need to be considered separately.
- The scope of the prohibition varies from company to company. Some companies comprehensively prohibit all methods, while others limit the prohibition to bonuses and cashback-related activities
*This article was created by the MoneyCharger editorial teamtheir content creation policy. The terms and conditions of each company were verified from September 15th to 30th, 2026, based on the officially published original documents (document name, clause number, and source are clearly stated in the text).Terms and conditions are subject to change without notice. Please be sure to check the latest terms and conditions yourself before trading.This article does not provide instructions on how to perform arbitrage, nor does it recommend it. Violation of the terms and conditions may result in account freezing, cancellation of profits, and refusal of withdrawals.Items that could not be verified are marked as "could not be verified," and it is not written that the lack of verification is "tolerated." Overseas FX brokers are not registered with the Japanese Financial Services Agency, andthe Financial Services Agencyandthe Consumer Affairs Agencyhave issued warnings about trading with unregistered brokers.
The terms and conditions regarding hedging using multiple accounts are covered in the section on multiple accounts in overseas forex trading , and typical cases where withdrawals are refused are covered in the section on overseas forex withdrawal refusals
What is Arbitrage? | Meaning and Mechanism in Forex Trading
Arbitrage is a type of trading that profits from price differences between items of the same value.In Japanese, it is also called "arbitrage trading" or "spread trading."While it is sometimes searched using the abbreviation "What is arbitrage?", it refers to the same thing.
The logic is simple. If the same currency pair is listed at approximately $0.94 at company A and approximately $0.94 at company B , then buying at the lower price and selling at the higher price will result in a profit regardless of which direction the market moves. This trade is based on the assumption that the prices will return to the same level (the spread will be eliminated) .
First of all, why do price differences exist?
This is the most important part of understanding arbitrage in overseas forex trading. The main reasons for price discrepancies between brokers are communication delays and errors in rate feeds
Several brokers write about this point in almost the same way in their terms and conditions. XMTrading's terms and conditions explain it like this:
Internet, connectivity delays, and price feed errors sometimes create a situation where the price(s) displayed on our Online Trading Facility do(es) not accurately reflect the market rates.
(Translation:Due to internet or connection delays, or errors in price feeds, the prices displayed in our trading environment may not accurately reflect market rates.)
Source:XMTrading Client Agreement (Tradexfin Limited), Section 55.3 (Accessed September 30, 2026)
In other words, from the broker's perspective, the price difference that arbitrage targets is "malfunctions or delays in their own system."There is no reason for a broker to welcome the act of profiting by exploiting such malfunctions.This is why almost all brokers prohibit it in their terms of service.
The broker's logic: "It won't go through because it's an over-the-counter transaction."
The terms and conditions provide a more detailed explanation.HFMand XMTrading take the position that the concept of arbitrage is not applicable in OTC (over-the-counter) trading in the first place
The concept of arbitrage and or taking advantage of these internet delays cannot exist in an OTC market where the Client is buying or selling directly from the principal.
(Translation: The concept of arbitrage, and the practice of exploiting communication delays,cannot exist in OTC markets where customers buy and sell directly from the other party (dealer).)
Source:HFM Terms of Business (HF Markets (SV) Ltd) Article 7.1 (verified September 30, 2026)
Unlike stocks traded on an exchange, overseas forex trading involves transactions with brokers.What customers perceive as "market price differences" is, from the broker's perspective, merely a "difference in their own offered price."This difference in perception is what leads to the strictness of the terms and conditions.
It's not illegal, but it's a breach of contract
Let me clarify something first. Arbitrage itself is not prohibited under Japanese law.Arbitrage trading is a common concept in the financial world and is practiced in stocks and futures.It is not subject to criminal penalties.
The problem ariseswhen you violate the contract (terms of service) with the service provider. Since you agreed to the terms of service when you opened the account,you will be subject to the measures stipulated in the contract if you violate them.
| illegality | Violation of Terms | |
|---|---|---|
| basis | law | Contract with the service provider (Terms of Service) |
| Arbitrage | It is not illegal | ★Prohibited by many businesses |
| things that happen | — | Transaction cancellation, forfeiture of profits,account closure, etc. |
| Who will make the decision? | judiciary | ★Discretion of the service provider(the terms and conditions explicitly state "sole discretion"). |
Arbitrage is prohibited in overseas forex trading | We checked the terms and conditions of 8 companies by clause number
After reviewing the terms of service of eight companies and searching for "arbitrage," I found that seven of them had a clause prohibiting it.The remaining company's clause wasn't found in the main text of their terms, but it was included in their campaign terms.
Conditions of this survey
- Target: Eight overseas forex brokers handled by this site for which we were able to obtain the original terms of service.
- Verification method : We obtained the original documents such as Client Agreements and Terms of Business published by each company and performed a machine search (we did not use summary sites or hearsay).
- Verification period: September 15-30, 2026
- Article numbering: ★Even within the same company, there may be multiple agreement documents, each with a different article numbering system. Therefore, please use the format "Document Name + Article ◯".
- If confirmation is not possible, write "Unable to confirm".Do not write "acceptable" if confirmation is not possible
- The order of listings is unrelated to whether or not there is a partnership.
List of prohibited clauses by business type
The scope of the prohibition can be broadly divided into two categories: those that comprehensively prohibit all methods, and those that limit the prohibition to only those related to bonuses or cashback . Confusing these two categories will lead to a misunderstanding of the actual situation
| Contractor | Scope of prohibition | Document name and article number | Measures stipulated in the terms and conditions |
|---|---|---|---|
| XMTrading | ★comprehensive | Client Agreement (Tradexfin Limited) Section 55.3"Unlawful trading techniques" Section 55.4/ Bonus-related matters arein Section D.11 | Cancellation/invalidation of transactions / Closure/suspension of all trading accounts / Prohibition of opening new accounts / ★ Non-application of zero-cut and offsetting from other accounts |
| HFM | ★comprehensive | Terms of Business ★Article 7 (Chapter title: "Arbitrage") Article 8"Prohibited Trading" Account Opening Documents Article 26.1 | Transactioncancellation/ Account modification/adjustment / ★Company approval may be required for future orders. |
| FXGT | ★comprehensive | Terms and Conditions v40 Sections 2.6and23.6.2(Definitions). Bonus-related matters are covered inSection 22.3.1. | ★Immediate account closure/ ★Forfeiture of related profits and bonuses |
| AXIORY | ★comprehensive | Terms and Conditions Section 30.6/Section 14.6(a) Swap-free provisions are covered inSection 19.7 | Cancellation or refusal of a transaction / Withholding of payment obligations / Closure of all accounts |
| Exness | ★comprehensive | Client Agreement (Exness (SC) Ltd) (No clause numbers are indicated; appears multiple times in the text) | Transactioncancellation(may be revoked) / Revocation of swap-free account eligibility |
| Tradeview | ★comprehensive | Client Agreement Article 6“PRICING, CONDITIONAL ORDERS AND GAPPING MARKETS” | ★Retroactive recovery of profits(reclaim) / Cancellation of a transaction |
| Axi | ★comprehensive | Client Agreement (SVG) (No clause numbers are indicated) | The measures were not clearly stated |
| IS6FX | Limited to bonus-related topics | Terms of Use, Article 13, Paragraph 2:"Cancellation of Bonus" | Bonus cancellation / Trade cancellation / Leverage restrictions |
| TitanFX | Unable to confirm | I could not find any mention of "arbitrage" in the English terms and conditions. | — |
| ThreeTrader | The full text of the terms and conditions could not be viewed | This information could not be found in the main text of the Client Agreement. However, the campaign terms and conditions do mention " fraudulent transactions, arbitrage, hedging , etc." | Campaigneligibility expires |
The title of Article 7 of HFMis "Arbitrage"
Of all the examples we found,HFM. was the clearest Article 7 of the Terms of Business is titled "Arbitrage. "
The Company does not permit the practice of arbitrage on the Trading Platform. Transactions that rely on price latency arbitrage opportunities may be revoked, without prior notice. The Company reserves the right to make the necessary corrections or adjustments on the Account involved, without prior notice. Accounts that rely on arbitrage strategies may at the Company's sole discretion be subject to the Company's intervention and the Company's approval of any Orders.
(Translation:We do not permit arbitrage on our trading platform. Trades relying on arbitrage opportunities due to price latency may be canceled without prior notice.We reserve the right to make any necessary corrections or adjustments to the relevant account without prior notice.Accounts relying on arbitrage strategies may, at our discretion, be subject to our intervention and approval of all orders.)
Source:HFM Terms of Business (HF Markets (SV) Ltd) Article 7.1 (verified September 30, 2026)
The last sentence is particularly noteworthy. It states that not only will the transaction be canceled, but all subsequent orders may be subject to company approval . In effect, normal trading will become impossible
XMTrading defines it as an "illegal trading method."
XMTrading's Section 55.3 is titled "Unlawful trading techniques ." Within it, arbitrage, sniping, and scalping are collectively defined as "Arbitrage."
The concept of using trading strategies aimed at exploiting errors in prices and/or concluding trades at off-market prices and/or by taking advantage of internet delays (commonly known as "arbitrage", "sniping" or "scalping" hereinafter, collectively, referred to as "Arbitrage") … we reserve the right, at our sole discretion, NOT to permit the abusive exploitation of Arbitrage … any Transactions or Contracts that rely on price latency arbitrage opportunities may be revoked, at our sole discretion and without prior notice being required
(Translation: This refers to trading strategies aimed at exploiting price errors, executing trades at off-market prices, or taking advantage of communication delays ( commonly known as "arbitrage," "sniping," or "scalping," and hereinafter collectively referred to as "Arbitrage" )... We reserve the right , at our sole discretion, not to permit the abusive use of Arbitrage ... Any trade or contract relying on arbitrage opportunities due to price latency may be canceled at our sole discretion without prior notice .)
Source: XMTrading Client Agreement (Tradexfin Limited), Section 55.3 (Accessed September 30, 2026)
What cannot be overlooked here is the inclusion of "scalping." This clause defines trading methods that involve repeatedly buying and selling in short periods of time. This means that even if you don't intend to engage in arbitrage, you could still be subject to this clause
The very act of "seeking profit without risk" is prohibited
Some clauses prohibit methods not by name, but by purpose.HFMaccount opening documents state the following:
The Client is not allowed to enter into any form of prohibited trading ie certain trading techniques commonly known as "arbitrage trading", "picking/ sniping" … and/or follow an abusive trading strategy ie any trading activity which is aiming towards potential riskless profit by opening opposite orders, during periods of volatile market conditions, during news announcements …
(Translation: Customers are not permitted to engage in certain trading methods commonly known as "arbitrage trading" or "picking/sniping," orany abusive trading strategies, such as taking opposing positions during periods of market volatility or economic indicator announcements to seek risk-free profits.)
Source:HFM Account Opening Documents, Section 26.1 (Verified September 30, 2026)
XMTrading also explicitly states in Article 55.4 that "risk-free profiting" is prohibited. From the perspective of the terms and conditions, the explanation "making a profit without taking any risk" directly corresponds to the definition of prohibited conduct.
Latency arbitrage is explicitly prohibited
Latency arbitrage , which exploits communication delays , has been specifically mentioned by several companies.
| Contractor | Excerpt from the terms and conditions |
|---|---|
| AXIORY Article 30.6 | "...If trading methods are conducted in an unbalanced or aggressive manner (e.g., the use of high-frequency trading and/or latency arbitrage)...the above trading strategiesAXIORYand remain prohibited." |
| Exness | "Customers will not use any arbitrage practices (including, but not limited to, the abuse of latency, price manipulation, or time manipulation) " Trades that rely on arbitrage opportunities through price latency may be canceled without prior notice ." |
| FXGT Article 23.6.2 | "Arbitrage strategies include internet and connectivity delays, price feed errors, and price latency." (This is explicitly stated as a definition.) |
| Axi | "Our customers will not gain unfair profits through arbitrage practices (including, but not limited to, the abuse of latency, price manipulation, and time manipulation) ." |
Tradeview has a policy of recovering profits retroactively
Tradeview's Client Agreement, Article 6, explicitly states the right to recover profits at a later date
Client understands and agrees that he/she will not enter into transactions for purposes of scalping, arbitrage or to intentionally exploit or manipulate any inaccuracy … TRADEVIEW LTD is then authorized to reclaim any trading profits Client obtains through the entering of transactions for purposes of scalping, arbitrage …
(Translation: The customer understands and agrees not to engage in scalping or arbitrage trading …TRADEVIEW LTD reserves the right to recover any trading profits obtained by the customer through scalping or arbitrage trading .)
Source: Tradeview Client Agreement, Article 6 (Accessed September 30, 2026)
The same clausealso defines scalping: "TRADEVIEW LTD defines scalping as any trade that is settled in less than three minutes."The fact that short-term settlements are repeated is itself a factor in determining whether it constitutes scalping.
Furthermore, Tradeview's Japanese Terms of Service page (approximately 47,000 characters) does not mention "arbitrage," "discretion," or "latency."These clausesonly found in the English Client Agreement. You will miss them if you only read the Japanese page.
Four methods and the clauses that each may conflict with
There are several methods presented as arbitrage, but all of them violate some part of the terms and conditions. Here, we will organize them not from the perspective of the procedure, but from the perspective of which clause is violated
| method | What to do | Conflicting clauses (those that could be identified) |
|---|---|---|
| Latency arbitrage | By taking advantage of the delay in the broker's rate feed, trades are executed at the older price after the price has moved | ★Specifically prohibited.AXIORYArticle 30.6 /Exness/FXGTArticle 23.6.2 (clearly stated in the definition) /Axi/ XM Article 55.3 /HFMArticle 7.1 |
| Inter-broker arbitrage | Take the difference between the prices offered by Company A and Company B. Take opposing positions to both companies | XM Article 55.4: "hedging in coordination with other parties" /HFMArticle 26.1: "The act of taking opposing positions to aim for risk-free profits" |
| Bonus Arbitrage | By using account opening bonuses and other incentives, you can limit losses through hedging while turning the bonus into profit | ★Most clearly prohibited. XM Article D.11 /FXGTArticle 22.3.1 “cash-back arbitrage connected to a trading bonus” /AXIORYArticle 19.7 /IS6FXArticle 13.2 “Arbitrage trading using bonuses” |
| Swap arbitrage | Take advantage of the difference in swap points. For example, combine a swap-free account with a regular account | AXIORYArticle 19.7 "Cashback Arbitrage, Carry Trades" /ExnessArticle 5.13 (Swap-Free Accounts) /XSexplicitly prohibits hedging in swap-free accounts. |
| Triangular arbitrage | Utilizing distortions in the price relationships of three currency pairs | This falls under the umbrella provisions of XM Article 55.3 andHFMArticle 7.1, etc. (which fall under the category of "trading strategies that exploit price errors"). |
Looking at the table, there's a common thread.None of these methods aim to profit by predicting market price movements; instead,they try to profit from loopholes in the broker's system and conditions. This is precisely the structure that the terms and conditions prohibit.
Bonus arbitrage is specifically prohibited
Of the four methods, those related to bonuses have the most detailed terms and conditions.Even brokers that do not have comprehensive prohibition clauses have separate rules regarding bonuses.
High-risk transactions using bonuses
Wrongful trading using bonuses on multiple accounts
Arbitrage trading using bonuses, or other activities that may cause damage to our company, such as price manipulation or market abuse
When the same or similar network (IP address) or terminal is used under a different name, or when it is determined that multiple accounts are operated by the same entity.(Translation: High-risk trading using bonuses /Fraudulent trading using bonuses across multiple accounts/Arbitrage trading using bonuses, price manipulation, market abuse, or any other actions that harm our company /Cases where the same or similar network (IP address) or device is used under different names, or where it is determined that multiple accounts are being operated by the same entity)
Source:IS6FX Terms of Service, Article 13 "Handling of Promotions," Section 2 "Cancellation of Bonus" (Accessed September 15, 2026)
Please pay attention to the last sentence. It states that if multiple accounts are used from the same IP address or device, that itself will be grounds for bonus cancellation . Using a family member's name is also subject to this clause
The conditions for account opening bonuses and deposit bonuses are covered in the sections on how to use overseas forex account opening bonuses and overseas forex bonuses . Please see here for information on how to use them within the scope of the terms and conditions.
Difference from hedging | Hedging within the same account is often not prohibited
One area that is often confused is its relationship with hedging.In short,hedging itself and hedging for arbitrage purposes are treated differently under the regulations.
| Treatment under the terms and conditions | |
|---|---|
| Hedging within the same account | Our survey, which reviewed the terms of service of 10 companies, found that zero companies prohibited this practice. |
| Hedging across multiple accounts and different companies | ★Several brokers prohibit this.XM's Article 55.4 explicitly states "internal hedging in coordination with others." |
| Hedging to aim for risk-free profits | ★This is prohibited for the purpose ofHFMArticle 26.1: "Trading to take an opposing position in order to aim for risk-free profits." |
| Hedging using bonus | ★Most explicitly prohibited.IS6FXArticle 13, Paragraph 2, etc. |
What happens if detection occurs | Measures outlined in the terms and conditions
Simply knowing that it's "prohibited" doesn't allow you to judge the magnitude of the risk.The terms and conditions specifically list the measures that the service provider can take if detection occurs.It's not just about canceling the transaction.
| Measures | The company and clause number specified in the terms and conditions | meaning |
|---|---|---|
| Cancellation/Invalidation of Transactions | XM Articles 55.3 and 55.4 /HFMArticle 7.1 /Exness/AXIORYArticle 14.6(a) | The profits earned from that transactionwould be lost. |
| ★Confiscation and recovery of profits | FXGTArticle 2.6 (forfeiture) /Tradeview Article 6 (reclaim) | Profits already in the accountwill be confiscated and recovered retroactively. |
| ★Closure and suspension of all trading accounts | XM Article 55.4 /AXIORYArticle 19.7 | Not just that account, but all of that person's accounts are affected |
| ★Prohibition of opening new accounts | XM Article 55.4 | From that point on, you will not be able to open a new account with that company. |
| ★★Zero-cut not applied + offsetting from other accounts | XM (Negative balance protection clause) | The negative balance does not disappear, and funds from another account are used to cover it |
| ★Approval is required for subsequent orders | HFMArticle 7.1 | Your account will remain active, butyou will no longer be able to conduct normal transactions. |
| ★Reservation of performance of payment obligations | AXIORYArticle 30.6 | Withdrawals and other payments can be stopped |
| Cancellation of bonus | XM Article D.11 /FXGTArticle 22.3.1 /IS6FXArticle 13.2 | previously granted bonuseswill be invalidated. |
The most serious clause is the one stating that "zero cut does not apply."
One of the most common reasons given for choosing overseas forex brokers is zero-cut (protection against negative balances). This system prevents you from incurring losses exceeding your deposit, but there are clauses that can negate this protection
… any indication or suspicion … of any form of arbitrage performed in your trading account either solely or in connection with other clients of our company (including but not limited to risk-free profiting) … constitute a violation of these Terms and Conditions. In such cases, we reserve the right, among others, NOT to apply our Negative Balance Protection policy and transfer any or all funds you may have in a different trading account to set-off the obligations (eg, negative balance) that have occurred to the other account used for any abusive acts.
(Translation: ...any form of arbitrage(including but not limited to risk-free profit generation) conducted alone or in conjunction with other customers of ours in a customer's trading account...this constitutes a breach of these Terms. In such a case, we reserve the right to, in particular,not apply the negative balance protection policy and to move all or part of the funds held by the customer in another trading account to offset any debts (such as negative balances) incurred in the account used for the abusive activity.)
Source: XMTrading Client Agreement (Clause regarding negative balance protection) (Accessed September 30, 2026)
There are two things we can infer
- Zero-cut protection is not applied, resulting in a negative balance . This means you could potentially incur losses exceeding your initial deposit.
- Funds in other accounts will be used to cover the deficit. It's not possible to isolate the problematic account.
- The article states that " any indication or suspicion" is sufficient; definitive proof is not required
Arbitrage is sometimes described as "low risk," but if you look at the terms and conditions, it's simply a change in the type of risk.Even if the risk of market fluctuations is small,the risk of losing your account and funds is added on top of that.
How will it be judged?
Based on what can be gleaned from the terms and conditions,the company uses the following points as criteria for its decision-making.All of these are items clearly stated in the terms and conditions.
| Materials for judgment | Terms and Conditions |
|---|---|
| Trading holding time | Tradeview Article 6: "Scalping is defined as a trade that is settled in less than 3 minutes." |
| Are you taking market risks? | XM Article 55.4: " A trading pattern that is solely aimed at financial gain and shows no genuine interest in trading in the market or taking market risks. " /Exness: " Trading that seeks to profit with minimal or zero risk ." |
| Timing of the transaction | HFMArticle 26.1: "During periods of market instability or when economic indicators are released" /Exness: "Trading is concentrated during periods of low liquidity." |
| ★IP address/device | IS6FXArticle 13, Paragraph 2: "When the same or similar network (IP address) or terminal is used under a different name" /Exness: "Accounts operated from the same location" "Accounts sharing the same device" |
| Deposit and withdrawal patterns | Exness: "Multiple accounts showing identical deposit and withdrawal patterns" |
| Similarity of trading patterns | Exness"Accounts showing similar or identical trading patterns" |
All clauses in the terms and conditions state that the decision will be made at the discretion of the service provider. The terms and conditions do not provide any means for customers to prove that it is not arbitrage. It is important to be aware that the system is not designed with the assumption that disputes will arise
Frequently Asked Questions about Arbitrage in Overseas Forex Trading
Is arbitrage prohibited in overseas forex trading?
Most brokers prohibit it.Our editorial team checked the original terms of service of eight companies and found that seven of them had clauses prohibiting it.HFM'sTerms of Business, Article 7, is titled "Arbitrage"and clearly states, "We do not permit arbitrage on our trading platform." XMTradingdefines arbitrage, sniping, and scalping collectively as "illegal trading methods" in Article 55.3. The remaining company did not explicitly mention arbitrage in the main text of its terms, but its campaign terms did mention "arbitrage trading."
Is arbitrage illegal?
It is not illegal.Arbitrage trading is a common concept in the financial world and is not prohibited by Japanese law.The issue is "breach of contract with the broker."Since you agreed to the terms of service when opening the account, you will be subject to the measures stipulated in the terms if you violate them."Not illegal" and "it's okay to do" are two different things.Moreover, the terms state that the decision will be made "at the sole discretion of the company," so it will not be easy to contest.
What happens when arbitrage is detected?
consequences are not limited to simply canceling the transaction.Measures explicitly stated in the terms and conditions includeforfeiture and repossession of profits(FXGTArticle 2.6, Tradeview Article 6),closure of all trading accounts(XM Article 55.4),prohibition of opening new accounts(XM Article 55.4),requiring company approval for future orders(HFMArticle 7.1),and withholding of payment obligations(AXIORYArticle 30.6). Particularly seriousdenies the application of zero-cut (negative balance protection) and instead transfers funds from another account to offset.You could potentially incur losses exceeding your initial deposit.
Is there a mechanism to detect arbitrage?
The terms and conditions specifically list the criteria for making a judgment. These include the holding time of trades (Tradeview defines scalping as settlements of less than 3 minutes ), whether market risk is being taken (XM Article 55.4, "trading patterns that are not genuinely interested in taking market risk and are solely aimed at financial gain"), matching IP addresses and terminals (IS6FXArticle 13, Paragraph 2,Exness), deposit and withdrawal patterns, and similarity of trading patterns. The terms and conditions also state that " any indication or suspicion" is sufficient, and definitive proof is not required.
What is bonus arbitrage? How is it handled under the terms and conditions?
Bonus arbitrage refers to a trading method that uses account opening bonuses and other bonuses to limit losses through hedging while turning the bonus amount into profit. Of the four trading methods, this is the most explicitly prohibited.Even brokers that do not have a comprehensive prohibition clause have separate rules regarding bonuses.IS6FXin Article 13, Paragraph 2Arbitrage trading using bonuses", and lists "when the same or similar network (IP address) or terminal is used under a different nameas a reason for bonus cancellation. Similar provisions can be found in XM Article D.11,FXGTArticle 22.3.1, andAXIORYArticle 19.7.
What is the difference between hedging and arbitrage?
It can be understood that hedging is a trading technique, while arbitrage is a trading objective. In our survey of the terms and conditions of 10 companies, we found that no brokers prohibited hedging within the same account . On the other hand, hedging across multiple accounts or other companies (XM Article 55.4 "Internal hedging in cooperation with others") and hedging aimed at risk-free profits (HFMArticle 26.1 "Trading to aim for risk-free profits by taking opposing positions") are prohibited. The fact that "hedging is possible" does not mean that "arbitrage is possible."
Are there any overseas forex brokers that offer arbitrage?
Based on our editorial team's review of the terms and conditions, we could not find any brokers that explicitly permit such practices. While you may come across information suggesting that "this broker is OK," the original terms and conditions often contradict this. For example,Exnessstates that " trading based on arbitrage opportunities due to price latency may be canceled without prior notice, " and Tradeview's Article 6 states that " they have the right to reclaim profits obtained through trading aimed at scalping or arbitrage ." Furthermore, even if we could not find a mention of a broker in their terms and conditions, this does not mean that they "permit" such practices. Terms and conditions are often divided into multiple documents, and specific provisions may be found in individual trading conditions or campaign terms and conditions.
How about using an EA specifically designed for latency arbitrage?
The terms and conditions also cover the use of tools. FXGTSection 2.6 explicitly states "whether manually or using AI or automated trading systems," and Tradeview's Section 6 also statesExnessalso covers "any electronic devices, software, algorithms, or trading strategies." " through scripts, code, electronic advisors, software, or any other form of computer program or manual trading ." Whether or not you use an EA does not affect the decision.
What should I do if my account is frozen due to arbitrage?
First, contact the broker's support team to confirm the facts.However, the terms and conditions generally leave thedecision to the broker's discretion, and there are typically no procedures in the terms and conditions for customers to file objections.Since overseas FX brokers are not registered with the Japanese Financial Services Agency,domestic financial ADR (Alternative Dispute Resolution) procedures cannot be used.As a result, recovery is practically difficult.Checking the terms and conditions before opening an account is effectively the only solution.
Is arbitrage really low-risk?
While the risk of market fluctuations is reduced, other risks are introduced.In addition to account closure, forfeiture of profits, and suspension of withdrawals due to violation of the terms and conditions,XM's terms and conditions stipulate that zero-cut does not apply, and there is a possibility of incurring losses exceeding the deposit amount. Furthermore, in practice, there are risks such as price differences not resolving as expected, unintended positions remaining due to only one side being executed, and differences being wiped out by spreads and fees.The explanation of "low risk" almost always does not take into account the risks stipulated in the terms and conditions.
What kind of trade is arbitrage, explained in simple terms?
This is a type of trading where, when the same item is priced differently in two different places, you buy at the lower price and sell at the higher price.In Japanese, it's called arbitrage trading or spread trading, andarbitrage." For example, if the same currency pair is priced at approximately $0.94 at company A and approximately $0.94 at company B, the idea is that by taking opposite positions in both, you'll retain the difference regardless of which way the market moves. However, in overseas forex trading,this price difference is oftendue to "delays in the broker's system or errors in rate delivery," andis therefore prohibited by the terms and conditions. It's important to note that the premise is different from arbitrage trading in the stock market, etc.
Summary | Read the terms and conditions before making a decision
This article summarizes the results of reviewing the original terms of service of eight overseas forex brokers regarding arbitrage
- Seven out of eight companies had a clause prohibiting arbitrage in their terms and conditions.The remaining company also had a mention of "arbitrage" in its campaign terms and conditions.
- HFM's Article 7 is titled "Arbitrage,"and it clearly states, "We do not permit arbitrage on our trading platform."
- XMTrading defines "illegal trading practices" in Section 55.3, and includes scalping in the same definition
- There are clauses that prohibit trading methods based on their purpose, not just their name. Theterm "risk-free profit-seeking trading" itself is the target (HFMArticle 26.1, XM Article 55.4).
- The measures go beyond simply canceling transactions. They also stipulate forfeiture of profits, closure of all accounts, prohibition of opening new accounts, non-application of zero-cut protection, and offsetting from other accounts.
- It's not illegal, but it's a breach of contract.The decision is at the discretion of the contractor, and the terms and conditions state that "signs or suspicions" are sufficient.
- Whether or not you use an EA (Expert Advisor) does not affect the decision.The terms and conditions also cover the use of tools.
The claim that "profits can be accumulated with low risk" only considers the risk of market fluctuations.When you look at the terms and conditions as well, the risk of losing your account and funds is also included. Moreover,overseas forex brokers are not registered with Japan's Financial Services Agency, so domestic dispute resolution procedures cannot be used.
All clauses in this article were reviewed in the public terms and conditions of each company between September 15th and 30th, 2026.Terms and conditions are subject to change without notice.Please check the latest terms and conditions yourself before starting any transactions.
MoneyChat is a service that allows you to receive a portion of the spread incurred in overseas forex trading as cashback.Within the terms and conditionsis a way to reduce trading costs. You can check the participating brokers and their cashback rates below.
