FXCM banned by the CFTC in the U.S. because between September 4, 2009 though at least 2014, FXCM engaged in false and misleading solicitations of FXCM’s retail foreign exchange (forex) customers by concealing its relationship with its most important market maker and by misrepresenting that its “No Dealing Desk” platform had no conflicts of interest with its customers.
FXCM Banned by CFTC
The CFTC found that:
FXCM had an undisclosed interest in the market maker that consistently “won” the largest share of FXCM’s trading volume – and thus was taking positions opposite FXCM’s retail customers. FXCM, the Order finds, formulated a plan in 2009 to create an algorithmic trading system, using an FXCM computer program that could make markets to FXCM’s customers, and thereby either replace or compete with the independent market makers on FXCM’s “No Dealing Desk” platform. Although FXCM eventually spun off the algorithmic trading system as a new company, in actuality the company remained closely aligned with FXCM, according to the Order. This market maker received special trading privileges, benefitted from a no-interest loan provided by FXCM, worked out of FXCM’s offices, and used FXCM employees to conduct its business, the Order further finds. , As of this morning, FXCM had sold all of their U.S. clients to Gain Capital.
Trading Forex Using Nadex Binary Options
This highlights one of the biggest reasons I switched over to Nadex Binary Options. As most of my clients know, I started out trading forex and I love forex. It moves 23 hours a day (closed from 5pm to 6pm New York time) and is the most liquid of all markets. However, fighting with the market makers (which quite often can be the broker itself) makes it even tougher to trade. This isn’t the case with Nadex Binary Options.
Nadex Binary Options is an exchange. Their job is to match buyers and sellers. They CANNOT take positions — period, end of story. Their income is derived from the exchange fees. This provides a level field for traders to trade one of the most liquid markets that moves all the time, without worrying over the “market makers”.