Banking Forex, online trading through bank brokers

There are quite a few participants in the Forex market who carry out currency transactions for their own needs or provide intermediary services to traders.

One of these participants are banks; they not only make the market, but thanks to the availability of free funds, they form the market.

At the same time, bank forex is when a bank begins to act as an intermediary, providing its clients with access to currency transactions.

In essence, he takes on the responsibilities of a dealing center by sending clients' transactions to the market and charging a commission for this, which is the main purpose of such activities.

Many people associate a bank with reliability and security, so there is a desire to trade on the stock exchange through this institution, but in fact, it also has its pros and cons.

Pros and cons of banking forex

Let's start, as always, with the most pleasant thing, namely, what are the advantages of bank forex as an intermediary in the provision of dealing services:

• Reliability of the bank - there is some guarantee that the bank will not disappear after a couple of years of its existence, while client funds participating in exchange trading are not subject to under the law on guaranteeing Vlads, so there is no need to harbor illusions.

• High liquidity – transactions are entered into the interbank market, which ensures high liquidity of most of the assets.

• Availability of a license - as a rule, banking forex is carried out under a license from the country in which the bank’s head office is located, and not under a license from an offshore jurisdiction.

• Convenience of replenishing and withdrawing money, since the trader’s account can be linked to a plastic card; on the other hand, the number of ways to replenish the account is also limited by this bank card.

In general, everything is solid and safe, as is customary in the banking environment; most of the largest Russian banks provide services for organizing exchange trading.

At least there are brokerage divisions in such companies as Sberbank, Alfa-Bank, VTB.

Well, now let's talk about the shortcomings, as it turned out, hiding behind the image of the bank, we are being deceived as usual, in fact, not everything is as rosy as they say in the advertising of such companies: • Bank Forex - it is implied that you enter into a brokerage service agreement with the bank

.

In fact, almost always the second party to the contract is an offshore company that simply has permission to use the brand of a well-known bank in advertising.

That is, the probability of bankruptcy is not slightly higher than that of any classic broker.

• Funds protection – deposits used for Forex trading are not insured by the Deposit Insurance Agency.

• The place of registration of the broker is almost always offshore, even if the name is very similar to the name of a bank you know.

This bank simply acts as a founder. • Limitation of the provision of services - that is, brokerage services are provided only to actual clients of the bank; this point is often present.

And in order to start trading, you first need to visit a bank branch and open an account there. • Leverage – or rather its size, which rarely exceeds 1:20, that is, it will not be possible to use a strategy such as scalping.

• Tax agent - tax is automatically charged on profits resulting from exchange trading.

There are other restrictions that are a little unusual for traders who have already tried working in standard dealing centers.

I won’t say anything about the quality of the services provided; it’s better to try and compare everything yourself, and only then decide whether a standard broker or bank Forex is more suitable for you.