What Does Mean, Forex Dealers
In distinct types of Forex market trading, Fx merchants handle as the counterparty to the contracts sold to the sell user. The underlying covenant is not traded on an real exchange such as the Chicago Board of Trade, but is rather entered in off - exchange. Thus, in cases the investor lost money, the trader, as the seller of the financial tool, makes money. This can lead to a interest conflict where the distributor may have a significant prejudice in direction of the investor losing finance.
Many Forex dealers prolong leverage to their customers at ratios of 400: 1 or higher, which affords customers to revise contracts worth significantly over their investment of cash.