What does foreign exchange broker mean? What is the role?
Our domestic foreign exchange investors are inseparable from foreign exchange brokers in foreign exchange investment. What is a foreign exchange broker? What is the specific role of a foreign exchange broker? This article will take you to understand.
Detailed introduction and role of foreign exchange brokers:
Foreign exchange brokers are the bridge between retail foreign exchange traders and foreign exchange market. (for details, please refer to the ranking of foreign exchange brokers in 2020)
There are many foreign exchange brokers in any active foreign exchange market. Just like the brokers in the stock market, the foreign exchange brokers only play the role of intermediaries in the foreign exchange market. Their main task is to provide correct and rapid trading information, so as to promote the smooth progress of foreign exchange transactions, and negotiate the exchange agreement for foreign exchange transactions on behalf of customers. It belongs to the buyer and seller Through the contact of foreign exchange brokers, the sellers buy and sell directly or indirectly from banks.
Foreign exchange brokers provide investors with a way to integrate with the bank's network and to buy currency pairs in a simple way. Before the emergence of foreign exchange brokers, those who want to do foreign exchange transactions need to have a lot of money and maintain a special relationship with banks to buy currency pairs.
If the investor closes the transaction immediately, the foreign exchange broker will charge the profit between the market price and the price paid by the investor, which is called the spread.
Classification of foreign exchange brokers: foreign exchange brokers are divided into general brokers and Street brokers.
Generally speaking, brokers use their own funds to participate in foreign exchange transactions and assume sole responsibility for their own profits and losses. At this time, brokers are self-employed; street running brokers represent clients in foreign exchange transactions and only charge commissions without taking any risks.
[disclaimer] the publication of this article by finance managers for the purpose of transmitting more information does not mean that they agree with their views or confirm their descriptions. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk