Learn More About the Conflict of Interest Between Dealing Desks and Traders: www.fxcm.com LEARN THE FACTS AND EXPERIENCE THE DIFFERENCE PRICING Meet Ed. Ed is a dealer at a typical Dealing Desk. Here is how trading with a dealing desk works. Generally, Dealing Desks typically have relationships with multiple banks and market makers, much like FXCM does. However, unlike FXCM’s automated straight-through forex processing system, Ed merely watches the bank prices. Ed decides what price his clients will see. Depending on Ed’s needs and the market conditions, he can create his own indicative price to display to the trader. EXECUTION Steve wants to buy Euros and his order is sent to the Dealing Desk. There, Ed decides what to do with it. Ed’s job is to make money, and he often does so by buying Euros from a bank at a cheaper price than he sells Euros to Steve. Oftentimes, this system of wheeling and dealing works for both Ed and Steve — but not all the time. RE-QUOTES Now, Steve wants to sell Euros. If the market is moving quickly, Ed might not be able to find a profitable match for Steve’s sell order before the bank prices move. Since Ed’s job is to make money, he is not going to take Steve’s trade at a loss. So, Ed issues a re-quote — rejecting the original order and giving Steve a new, worse price that he can either accept or reject. In fast markets, this can happen multiple times and Steve can be re-quoted again and again again. This can ruin Steve’s exit, costing him
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