...afterall
Looking around today, the brokers that are still standing are mostly market maker brokers.
Those who are ECN, FXCM, Alpari etc seem like they are going under.
The reason seems to be that in the MM models, the brokers are your counterparty, when you lose, they win.
But with ECN brokers, since they pass you onto the main market through their liquidity suppliers, they assume the risk if their clients accounts go bust, so they end up owing their liquidity suppliers. This is why FXCM owes 225million.
So far as I can tell anyway.
Looking around today, the brokers that are still standing are mostly market maker brokers.
Those who are ECN, FXCM, Alpari etc seem like they are going under.
The reason seems to be that in the MM models, the brokers are your counterparty, when you lose, they win.
But with ECN brokers, since they pass you onto the main market through their liquidity suppliers, they assume the risk if their clients accounts go bust, so they end up owing their liquidity suppliers. This is why FXCM owes 225million.
So far as I can tell anyway.