Thread: Dealing Desk - Is this true?

I've had a chat with a dealing desk broker and got to know this from the conversation

Broker: We are a dealing desk.

Me: does the dealing desk trade against customers?

Me: i've heard several rumours about dealing desk doing that

Me: such that they do not only earn from spread only

Broker: Dealing Desk firms do provide you constant liquidity all time instead of forwarding every order they receive to a bank.

Broker: This means that you get a better and faster execution.



Can anyone confirm this if it's true?

Originally Posted by dennerle

I've had a chat with a dealing desk broker and got to know this from the conversation

Broker: We are a dealing desk.

Me: does the dealing desk trade against customers?

Me: i've heard several rumours about dealing desk doing that

Me: such that they do not only earn from spread only

Broker: Dealing Desk firms do provide you constant liquidity all time instead of forwarding every order they receive to a bank.

Broker: This means that you get a better and faster execution.



Can anyone confirm this if it's true?

thats correct, additional:

- customers with 1 lot orders and more are normally redirected to the banks asap, banks accept normally only orders with 1 lot or higher!
- customers with less the 1 lot are collected and then the order goes to the banks
- as mostly noted, 95% of all traders felt, so the broker trades 95% against theese customers = if you buy, broker sells
- brokers have enough stats in their order book about you, they know which customer is profitable and which not
- if a broker says, he have no dealing desk, check out if he requotes, requotes ocourring if the broker backend system is busy, and your order is in the queue
- real ecn brokers redirect your order in milliseconds to the interbanks = no requotes but often higher spreads = ecn-no rquotes-often higher spreads, dealing desk broker-requotes-fixed spread
- ecn brokers doesnt matter in which direction you trade, their income is the variable higher spread
- dealing desk brokers with fixed spread must calculate very sharp their biz, because banks have no fixed spread, example: bank offer eur/usd with spread 12, broker gives you with fixed spread 3 = - 9 spread for the broker, now the broker trade against you, requotes your order too, to eliminate the -9 spread and so on, this is the calculation