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Speculation in forex/futures/interbank/cash settlement only?

Asked by: forexsheet 128 views balance sheet, benefit, big boys, business purposes, commodity index, contracts, false advertising, flowchart, forex broker, futures, fxcm, interbank, liquidity, money, physical delivery, public speculation, sheet changes, speculators, spot forex

In theory, the benefit of speculators in the market is to provide liquidity for those who need to hedge for business purposes. My question is, in futures and forex, contracts are cash-settled and 99% of brokers forbid any physical delivery in both the spot Forex and Futures forex/commodity/index/etc futures. How is public speculation money being effectively used as the other side of the hedge trade if we aren’t trading the same contracts as the big boys?

Like with FXCM or any other Forex broker that says they are STP, when they credit your account 100,000QTY of EUR/USD if you went long 1 standard lot, are they really giving you 100,000 euro’s that another person (Be it a bank, company, government) needed to unload on the Interbank? That’s how these companies market, but I’m wondering if it’s a bunch of false advertising anymore.
okay so can you give me a view of the flowchart? i.e x > y > z

whos balance sheet changes?

Tags: balance sheet, benefit, big boys, business purposes, commodity index, contracts, false advertising, flowchart, Forex, forex broker, futures, fxcm, interbank, liquidity, money, physical delivery, public speculation, sheet changes, speculators, spot forex

2 Answers

Aaron Brown on Aug 10, 2011

As a 10+ year Forex trader, here is how I trade to make money…

If you want, you can also follow these steps. I’ve dumbed it down to the easiest, yet safest way to win in the Forex.

1) Open a live account at http://bit.ly/iPV25O
2) Select AAAFx broker, and open MICRO account with 200:1 leverage.
3) Deposit at least $300 in your account to start.
4) "Add to Portfolio" the top 20 strategies at http://bit.ly/mJiyZV
5) Don’t add any strategy that makes less than 10 average pips per trade.
6) …when adding strategies, set maximum number of trades to 5, and…
7) …select lot size of 0.1 "mini" lots for each $1000 in your account.
It will trade automatically, following all those top 20 strategies.
9) Then sit back, relax and take a vacation as you make easy Forex money.
Common Sense on Aug 10, 2011

Lack of physical delivery doesn’t mean no change in the balance sheet. The Forex Brokers certainly are guilty of misleading advertising, but not the way you suggest.

Speculation in forex/futures/interbank/cash settlement only?

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