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Quote from BigFunky:
Hi Katerine,
I note that on your website it states that Instaforex is an ECN broker, and as you have also claimed, that it is not a market maker or a bucketshop.
However, you have also mentioned that Instaforex makes it's profits from the spread - I have also noticed on the Instaforex website that the spread appears to be a constant 3 pip spread for the majors.
How can it be possible that an ECN broker, one that does not participate in the market as a market maker or act as a bucketshop, make any profit from the bid/ask spread?
If Instaforex adds pips to a clients order then sends it to the 'market', the actual bid or ask sent through is determined only by Instaforex, which seems to fix the spread to 3 pips wide (which is about 2 pips above the typical ECN rate). Any difference between that rate and a client's order is profit to Instaforex. Isn't this the definition of a bucketshop?
No, it is not. According to your definition it turns out that all Forex brokers are bucketshops and scammers, because ALL FOREX BROKER (including ECN) earn from spreads. In different companies spreads also differ, so your suppositions are wrong.
There are a lot of different ambiguous descriptions of ECN-trading in the Internet. Our company offers ECN-trading by a scheme of all clients lots summarizing with the further transferring to the counter agent. Every client makes a deal with another one or appears to be a part of summarized position transferred to ECN-counter agents.