Replies to post #26482 on FOREX TRADERS

[ZavBar]

So is it kinda like they're giving you their own quote for a indece & not actually pooling those funds w/in the actual indece pool in question

yes

thus they're in essence creating their own mrkt pools & providing their own quote for which is close or w/in a certain range so ta speak

yes

the cfd money held is not being placed in the same pool for that of the actual instrument itself

yes

they can fairly easily suit their best interests by running a quote a few pts away from where the indece is actualy trading

exactly

I think you've got it worn - it's somewhat like a virtual marketplace. When you place a cfd trade, 2 things can happen - either some other sap in the same system has to have an order that will complement yours (i.e. you want to sell 10 lots of crude and he/she wants to buy), in which case you run into serious liquidity issues; or, the house fills your order - in which case you get requoted, experience major slippage and the house has a vested interest in you losing money. of course the demos are always real slick