1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Bucket Shop

Discussion in 'Traders Glossary' started by Pharaoh, Jun 30, 2008.

  1. Pharaoh

    Pharaoh Colonel

    Oct 3, 2007
    Likes Received:
    A brokerage that takes the opposing side of all customer trades and seldom, if ever, passes orders on to the actual market. Bucket shops count on the fact that most forex traders lose money.

    Since true bucket shops make money only from spread and from customers losing money, they will go to great lengths to make life difficult for customers who make money trading forex to continue to be profitable and/or to withdraw any profits.

    There are brokerages that take opposing positions as new orders come in, then consolidate customer orders and pass them on to the market. Since the brokerage no longer gains or loses anything based on the gains or losses of customers, these would not qualify as true bucket shops.





Share This Page