[obe24]

The swap is the difference in the interest rates between the two currencies in the pair you are either buying or selling. Again, because you are borrowing one to buy the other, there is a difference in the rate and that must be accounted for. The swap does this. For instance, in a pound/yen pair - if you are long this pair, you have essentially borrowed yen (and are responsible for the interest at the Japanese rate) to purchase pounds (you will receive interest at the British rate). Because Japan has nearly a zero interest rate, if you are long the pound/yen, you receive interest for holding the pound each day. This is called the swap and it's paid when contracts roll over each day at midnight GMT.

Don't even get me started on Crown. Do not use those guys.

As far as bucketshops go, it is a derogatory term, but from what I can tell just about all retail shops fall into that category. Some are more fair than others. But very few are actual brokers in the classic sense of the word - that the broker does not have an interest in the trade but only takes a cut to match up a buyer and a seller. It's probably a bit more complicated than that - I'm sure alot of these guys bundle up their smaller positions and then hedge them off in the true interbank market. But I would guess for 90% of retail trades, the broker is just filling and taking the other side.