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.

The distinctive features of dealing centers are:

1. The absence of the possibility of real transactions ; traders are only able to engage in speculative trading. The client cannot receive the purchased currency or, conversely, sell their assets for real money.

2. Margin trading – to increase the volume of transactions, traders have the opportunity to use leverage. This is not mandatory; if desired, they can trade only with their own funds with 1:1 leverage.

Typically, the leverage provided by dealing centers ranges from 1:1 to 1:2000.

To determine the optimal balance between profitability and risk , it is important to know how to choose leverage .

3. Fees for executing transactions – DCs generally charge two types of commission for their intermediary services – spreads and swaps.

The spread is the difference between the purchase and sale of a currency. This means that if you bought euros at $1.3545 per euro and immediately sell them back, the price will be lower than $1.3543. These two factors constitute the dealing center's commission for the currency transaction.

A swap is a fee for carrying positions overnight. This fee implies that you borrow one of the currencies in the transaction, and accrue interest on the other. If the interest on the loan is greater than the deposit, the difference will constitute the commission.

4. Trading Instrument : You can trade virtually any asset through the dealing center, be it currency, precious metals, or energy. Trading is primarily conducted on the most liquid instruments, which enjoy stable supply and demand.

5. Trading Organization : The entire trading system is based on the internet; for convenience and ease of use, all transactions are conducted using specialized software – the trader's terminal.

Essentially, forex dealing centers are structures designed to profit from exchange rate fluctuations and do not involve transactions with real assets. To provide leverage, companies use their own funds, or more often, passive client funds not involved in trading. Quotes are virtually identical to those actually available on global exchanges, and commercial banks typically act as liquidity providers.