how does forex brokers make money?
how does forex brokers make money? For traders to purchase and sell currencies on the forex market, forex brokers offer a platform. By giving access to liquidity providers like banks and other financial institutions, they operate as middlemen between buyers and sellers and streamline transactions. Spreads, commissions, swaps, and other fees are just a few of the revenue sources used by forex brokers to generate income. Spreads Typically, forex brokers generate income by levying a spread on a currency pair's bid-ask price. The price at which a seller is willing to sell a currency is known as the asking price, whereas the bid price is the amount at which a buyer is willing to buy it. The spread, which is the difference between the ask and bid prices, is how much money a broker makes on a trade. For instance, if the asking price is 1.2002 and the bid price is 1.2000 for a currency pair, the spread would be 2 pips, and the broker would profit by 2 pips on each trade. Spreads can be fi...