What are the differences between FX market makers and broker/dealers? How are they related?
FX market makers and broker/dealers play important roles in facilitating foreign exchange (FX) trading, but they have distinct functions and responsibilities. Here’s a breakdown of their differences and how they relate:
Function:
Relationship:
Key differences:
Feature | Market Maker | Broker/Dealer |
---|---|---|
Function | Creates market, quotes prices | Connects buyers and sellers |
Profit | Bid-ask spread | Commissions or spreads |
Market making | Yes | No |
Trading for own account | Limited | Usually not |
Client relationship | Limited interaction | Direct interaction |
Additional notes: