Business model of RoboForex online forex broker

There are two typical Forex Broker models:

Forex broker - Straight Through Processing (STP)

In this model, a Forex Broker is an intermediary between its clients and liquidity providers. Clients’ orders in the STP model are automatically sent to aliquidity provider, and a Forex Broker gets a commission and a part of the spread. In this model, a Forex Broker Company is interested in increasing the trade volume, as it profits by receiving commission for each deal. There is no conflict of interest between the Forex Broker doing STP and its client.

Forex broker - Market Maker

This model implies that aclient buys and sells through a Forex Broker. In fact, the Forex Broker, at the same time, is a counterparty of a deal. If clients get profit, a broker bearsa loss, and vice versa. The most of the clients of a Forex Broker have no experience at Forex exchange market, so 95% of themare most likely to lose their money. This model resembles a casino, where most clients are expected to lose their deposits within 1-2 months. In this model, there is a conflict of interest between a broker and its client.

RoboForex Hybrid forex broker business model

For all cent accounts, RoboForex serves as a market maker, i.e. the other party of the transaction. It is due to the terms of the liquidity provider, which do not allow transactions fewer than some specific volume.

For all standard and ECN accounts, RoboForex appliesthe STP technology through a bridge connected to a liquidity provider. All transactions that exceed 0.1 lot (10,000 units) are sent to the bridge and then to liquidity provider. RoboForex receives a part of the spread from each transaction.