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1. Basic interview question

Is There Commission In Forex Trading?

To put it simply, no. Unlike the stock market that you’re probably used to, forex trading is a principals-only market. And unlike these exchange and physical-based markets, here firms are called dealers and not brokers. Dealers accept market risk by being the contra party to the investing trade. While brokers charge commission, dealers make their compensation via the bid-ask spread.

What exactly is the bid-ask spread? This spread is the difference in the amount of the ask price and the bid. Often, the ask price surpasses the bid. In this rule, every gain (or profit from the difference) down to the very last penny is considered to be a profit and given to the investor. However, this bid-ask spread is quite tough to overcome and makes scalping in this marketplace that much more difficult.

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