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  1. #11
    Active Member
    They suck us to make their money, lo!

  2. #12
    Specialist Member RCox's Avatar
    I actually like this question a lot because it asks about a vital part of the process but is not often asked. In any trading broker, there are going to be small fees that are associated with each trade, and in the best case scenarios that is where the broker is making its money. In the worst case scenarios, the broker knows that most traders lose and will actually trade against you. In all scenarios, your broker wants you to trade as much as possible because this is how they can make the most money. This is also why they work so hard to avoid giving you your money back. They assume you will get tired of trying and just keep trading until your account reaches 0.

  3. #13
    Veteran Member uj.forex's Avatar
    whatever you trade and lose in those trades, it goes to the broker... as simple as that...

    plus, the spread that you pay while entering the position, that goes to the broker as well, regardless of whether your trade is a win or lose for you.

  4. #14
    Specialist Member RCox's Avatar
    Quote Originally Posted by uj.forex View Post
    whatever you trade and lose in those trades, it goes to the broker... as simple as that...

    plus, the spread that you pay while entering the position, that goes to the broker as well, regardless of whether your trade is a win or lose for you.
    That isn't true, it goes back to the market more than the broker (unless the broker is trading against you). The reason for this is that the broker is not able to acquire any asset for free.

  5. #15
    Rookie Member Jacob's Avatar
    95% of the traders out there are acting like gamblers, which means most of them are losing their money

  6. #16
    Specialist Member LesterK's Avatar
    In case of binary options the broker most often plays against you. That is true i.e. it is the opposite side of each trade, so when you win he lose and when you lose he win. That’s why they prefer to keep you trading until eventually blowup your account. Of course if you are profitable and the broker is fair there is no problem for him to pay you all the profits, because most of his customers (almost 95%) are losing money and he has descent return. Actually only very big wining contracts could be a problem for him. But that is why most of the brokers limit their maximum allowed size of the deals to 10k or something similar. If they are well capitalized there will be no problem for them to pay several 10k profitable options.

  7. #17
    Solid Member
    Quote Originally Posted by LesterK View Post
    In case of binary options the broker most often plays against you. That is true i.e. it is the opposite side of each trade, so when you win he lose and when you lose he win. That’s why they prefer to keep you trading until eventually blowup your account. Of course if you are profitable and the broker is fair there is no problem for him to pay you all the profits, because most of his customers (almost 95%) are losing money and he has descent return. Actually only very big wining contracts could be a problem for him. But that is why most of the brokers limit their maximum allowed size of the deals to 10k or something similar. If they are well capitalized there will be no problem for them to pay several 10k profitable options.
    I don’t fully agree with you Lester! The broker is not playing always against you, because there are number of times when opposite trades from his customers match each other and in this case he is only a mediator of the trades. This way work the NADEX platform and I think many of the reputable binary options brokers work this way. If they match their customer orders they decrease their risk and profit from the spread of the paid contracts and premium win. So you are only partially right in my opinion.

  8. #18
    Legendry Member willyw's Avatar
    Quote Originally Posted by Rosen33 View Post
    I don’t fully agree with you Lester! The broker is not playing always against you, because there are number of times when opposite trades from his customers match each other and in this case he is only a mediator of the trades. This way work the NADEX platform and I think many of the reputable binary options brokers work this way. If they match their customer orders they decrease their risk and profit from the spread of the paid contracts and premium win. So you are only partially right in my opinion.
    Quote Originally Posted by LesterK View Post
    In case of binary options the broker most often plays against you. That is true i.e. it is the opposite side of each trade, so when you win he lose and when you lose he win. That’s why they prefer to keep you trading until eventually blowup your account. Of course if you are profitable and the broker is fair there is no problem for him to pay you all the profits, because most of his customers (almost 95%) are losing money and he has descent return. Actually only very big wining contracts could be a problem for him. But that is why most of the brokers limit their maximum allowed size of the deals to 10k or something similar. If they are well capitalized there will be no problem for them to pay several 10k profitable options.
    Both Rosen and Lester are correct. Before 2000 where dealers monitor traders position when they places an order. As what Lester says small account size usually goes into the "bucket" and the brokers don't take risk with big account size especially those big account size that trades small. When online trading starts, brokers don't need dealers to monitor trades anymore. It all hi-tech and brokers offsetting (matching) orders using programs and its easier to play against traders using programs. As we know there are difference in quotes and spreads when placing small orders and big orders. So the issue is they have more than 1 data feed; 1 is to trade against traders as Lester says and the other is to match orders and outstanding orders at the end of the day will be place to institutions.

  9. #19
    Senior Member Deanfx's Avatar
    Quote Originally Posted by willyw View Post
    Both Rosen and Lester are correct. Before 2000 where dealers monitor traders position when they places an order. As what Lester says small account size usually goes into the "bucket" and the brokers don't take risk with big account size especially those big account size that trades small. When online trading starts, brokers don't need dealers to monitor trades anymore. It all hi-tech and brokers offsetting (matching) orders using programs and its easier to play against traders using programs. As we know there are difference in quotes and spreads when placing small orders and big orders. So the issue is they have more than 1 data feed; 1 is to trade against traders as Lester says and the other is to match orders and outstanding orders at the end of the day will be place to institutions.
    The willyw answer is most close to the truth, but as he stated this was the situation before 2000 and now most of the brokers use trading and risk management software that is used to offset the transactions. That way there is no trading against the clients unless the broker is willing to take that risk, but I think that the most reputable brokers have their hedging contractors.

  10. #20
    Rookie Member
    Most are paid on the broker or origination fees they charge. Just apply at any firm. You will get hired or not! Yes there is good money in it if leads are provided.

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