MM Broker– Market maker model
Market Makers charge lower commissions and have lower capital requirements for new traders. Furthermore, market maker brokers are usually able to offer a much wider variety of assets compared to their DMA brokers.
However, conflict of interest issues might arise since essentially they are trading against the traders in order for them to make money. Market makers make the profit on the spread between ‘Bid’ and ‘Ask’ quotes.
The market makers hold the right to refuse your trades.
What is CFD trading and how to find the top CFDs brokers?
CFDs are popular financial derivatives for trading on thousands of various financial markets without ever having to own the underlying asset.
The CFD market is changing, with regulatory control on financial trading tightening as regulators crack down on non-compliant providers. Governments and regulators around the world enforce leverage caps for retail CFD Brokers. CFD trading has quickly become a popular investment instrument among retail traders.
The leading CFD brokers offer a range of online CFD trading platforms including MT4, cTrader, WebTrader and mobile apps for iPhone, Android, and tablets.
Live4Trading provides an updated comparison of CFDs Brokers.
Just as you would deal with any financial institution, you should do the necessary due diligence investigations to verify whether the CFD broker has a license to operate in the UK.
Regulated brokers are liable to hold funds in dedicated trust accounts which are legally protected and cannot be used to pay off the broker’s operation liabilities.