Here are the bad guys we keep mentioning earlier. Forex bucket shops are brokerage firms that have “questionable” trading practices (e.g., unusually frequent price misquotes or re-qoutes, slippage only favorable to the broker, stop hunting, etc.).
And it’s precisely this greedy, money-oriented philosophy that drives the people operating bucket shops.
The name comes from brokers back in the day who used to put their clients’ phone-in orders on slips and then dropped them (the slips, not the clients) in a tiny bucket instead of actually executing them.
Without putting the orders out into the free market, the client is actually betting against the forex bucket shop operators who are also known as bucketeers.
These old school bucketeers do not usually disclose the real price of the asset that their client is trading, which means that they could tell the client that the price moved or didn’t move–whatever was in favor of the broker!
But thanks to the invention of the internet–and improving regulations and enforcement–newbies have less to worry about these days. Unfortunately, bucket shops are still out there so beware!
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