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Originally Posted by TraderABC
Hello all. I have this question that I've couldn't find answer for:
What happens when you open leveraged (i.e. 1:100 ) position? Where do your broker find the money to shell out 99K for your 1K? Considering there maybe thousands of clients opening positions (and perhaps many lots at once), where do your brokers find the money of their own to put? Basic math can show that brokers may require to pay HEAVY sums of money. So, who pays your brokers? How are they protected? If you open a position, does that mean that there have to be 99 other people opening at the same price? Is that why slippage occurs (they get the closest bucket fill?)
Thank you.
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Spot forex deals have a settlement date 2 working days forward, and positions left open overnight are rolled-over, in effect closing and re-opening the position which starts the 2-day clock ticking again.
Mick