Dealing center.
Dealing is one of the types of speculative trading, the main goal of which is to obtain excess profits from trading on currency, stock or commodity exchanges.
A dealing center is a specially created company for dealing, providing its clients with the opportunity to carry out transactions with various types of assets, while trading can be carried out both on one of the exchanges and on the internal platform of the dealing center.
Distinctive features of dealing centers are:
1. Lack of possibility of real transactions , here only speculative trading is available to traders, the client does not have the opportunity to receive the purchased currency in his hands or, on the contrary, sell his own assets for real money.
2. Margin trading – to increase the volume of transactions, the trader has the opportunity to use leverage; this condition is not mandatory; if desired, you can only trade your own funds with a leverage of 1:1.
Typically, the amount of leverage provided by dealing centers ranges from 1:1 to 1:2000.
In order to determine the optimal ratio of transaction profitability and risk, you need to know how to choose leverage .
3. Fees for making transactions - basically, DCs charge two types of commissions for intermediary services - spread and swap.
Spread is the difference between buying and selling a currency, that is, if you bought the euro at a price of 1.3545 dollars per monetary unit and want to immediately sell it back, then the price will be lower than 1.3543.
These two points will constitute the dealing center’s commission for currency transactions. Swap is a fee for transferring positions to the next day; it is understood that you take one of the currencies in the transaction on credit, and you are charged interest on the second.
If the interest on the loan is more than what you were charged for the deposit, then the difference will be the amount of the commission. 4. Trading instrument - you can trade through a DC in almost any asset, be it currencies, precious metals or energy resources.
Basically, trading is carried out on the most liquid instruments that enjoy stable supply and demand. 5. Organization of trading - the basis of the entire trading system is the Internet; for the convenience and comfort of work, all operations are carried out using special software - the trader’s terminal.
In fact, Forex dealing centers are a kind of structure that is designed to make money on exchange rates and does not involve transactions with real assets. To provide leverage, companies use their own funds, and more often the passive funds of clients not involved in trading. quotes practically do not differ from those actually existing on world exchanges; commercial banks, as a rule, are liquidity providers.