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Originally Posted by Mainframes
Okay, I understand that the broker will cover my trade 'in house'. I.e. if I ask to buy EUR/USD, then the broker will sell EUR/USD if there's someone 'in house' to sell it to.
1) Some brokerage firms only have 6000 or so clients. How easy is it to cover the trades 'in house' in order to make the spread? What happens if they can't cover the trade and the trade is too small for a bank to accept, do they then take an overall position themselves (i.e. we trade againsy them)? That is scary because they are the marley maker!
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Yep... Considering that ~95% of people lose, brokers aren't afraid to take the ther side.
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2) Brokers make money off the spread, and if one puts in large order which they cannot cover 'in house', then they must trade with a bank in order to make their net position neutral. From these posts it appears that a trade of 100,000 is too small to be passed through to a bank. Typically when is a trage large enough to be put through to a bank?
Cheers
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It is usually found on brokers website. From what I've read it has to be 1m or above (I've heard as big as 7 mil dollars) I don't know if it is million of dollars leveraged or not. So if you are trading mini, then FORGET that you account goes outside of the brokerage... Even standard account has to be atleast 10lots for it to go through the brokerage (if they so decide)... scary....
not my 2 cents.