New answers tagged brokerage
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In some cases, they may not even carry out the transaction you are performing. They simply pretend that they do. So for small trades, they don't need any real foreign currency at all.
The brokers charge a commission on every transaction you make. This means that, averaged out over many customers, they will always make money. If you are lucky enough to ...
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The forex broker is a counterparty in a derivative trade with their customers. However, a forex broker can get leverged spot forex currency positions from a commercial bank just like their customers can get positions from them. So the forex broker can possibly, or will likely, keep a balanced book regardless of what their customers do.
Also, a U.S. forex ...
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Certainly, the forex account is in Base currency and positions in the account are, for example, either sell Base/Other, buy Other/Base, or Base cash. If the account deposits and the account positions are the same size then there is no actual leverage even though a margin deposit is accounted to each position. That accounting makes a free cash balance amount.
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