Pakistan Forum
Assalam-o-Alaikum

Register Here and Enjoy Chat Room. Good Environment
Best for Friend Ship.
Pakistan Forum
Assalam-o-Alaikum

Register Here and Enjoy Chat Room. Good Environment
Best for Friend Ship.
Pakistan Forum
Would you like to react to this message? Create an account in a few clicks or log in to continue.


Pakistan Forum
 
HomeLatest imagesSearchRegisterLog in

 

 Retail foreign exchange brokers

Go down 
AuthorMessage
imagine_raza




Posts : 99
Join date : 2010-07-18

Retail foreign exchange brokers Empty
PostSubject: Retail foreign exchange brokers   Retail foreign exchange brokers Icon_minitimeMon Jul 19, 2010 8:13 pm

Retail traders (individuals) constitute a growing segment of this market, both in size and importance. Currently, they participate indirectly through brokers or banks. Retail brokers, while largely controlled and regulated in the USA by the CFTC and NFA have in the past been subjected to periodic foreign exchange scams.[10][11] To deal with the issue, the NFA and CFTC began (as of 2009) imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone.

There are two main types of retail FX brokers offering the opportunity for speculative currency trading: brokers and dealers or market makers. Brokers serve as an agent of the customer in the broader FX market, by seeking the best price in the market for a retail order and dealing on behalf of the retail customer. They charge a commission or mark-up in addition to the price obtained in the market. Dealers or market makers, by contrast, typically act as principal in the transaction versus the retail customer, and quote a price they are willing to deal at—the customer has the choice whether or not to trade at that price.

In assessing the suitability of an FX trading service, the customer should consider the ramifications of whether the service provider is acting as principal or agent. When the service provider acts as agent, the customer is generally assured of a known cost above the best inter-dealer FX rate. When the service provider acts as principal, no commission is paid, but the price offered may not be the best available in the market—since the service provider is taking the other side of the transaction, a conflict of interest may occur.
Back to top Go down
 
Retail foreign exchange brokers
Back to top 
Page 1 of 1

Permissions in this forum:You cannot reply to topics in this forum
Pakistan Forum :: Forex :: What is Forex?-
Jump to:  
Free Web Counter
Free Web Counter
Free forum | ©phpBB | Free forum support | Report an abuse | Forumotion.com