To be fair, I do not think that people here think this way. I suspect that everyone here understands and accepts that brokers are a business and that they need to make money.
The problem that I have, personally, is not knowing if we are getting fair terms or not, let alone the best terms possible. It is easy to compare what an offshore broker offers with that of a local broker and say that the offerings are much better and that we should all be happy and thankful for that and to not question it. But it is only partly true, since we can always hope for things to improve, especially if there is room to do so. It is not knowing if there is room to do so that is difficult, or, at least knowing how to make progress in that regard.
My previous thoughts on the matter are that it is unknown to me how much a broker actually makes, once all operating costs are covered. We can try to determine the amount of volume that the broker sees and surmise that they must be making a killing off of our backs, but without knowing the full details for their costs to operate, we are only guessing and assuming.
If a broker that we use has to pay someone for access, and then that second broker also has to pay someone and so on and so forth, then the question becomes whether or not it is possible to remove some of these middle-men operators in order to get access to better services.
There are always legislative steps that can open doors for progress. But it is hard to push for something when you have nothing to offer (i.e. they have nothing to gain). When we consider just how much volume is traded every hour, every minute and every second etc., and compare that to what we are being charged to open and close a trade, it really starts to look ridiculous on the surface.
Obviously, the brokers that we use are not seeing all of those profits, but how much money is really, truly needed for everyone to be happy at the end of the day? Are we seeing the best that can be offered already? I seriously doubt it. I suspect that there is a heavy imbalance. But I do not truly know. It does not mean that I am not thankful, nor that I think that we should not question it.
I never asked or even expected to have access to free trading. I am just asking the question of whether or not there is any room for improvement. I think that it is easy for many to not question it, to see what they have and be thankful for it without even thinking if things could actually be better. This mass contentment does not encourage change. Just as many brokers did not offer a stable coin for transfer of funds until traders started asking for it (or demanding it). If you say nothing, then you can expect nothing to change. And now that many brokers offer a stable coin option, many traders are happier as a result, which has likely brought more business to those brokersâŚalong with more money and better offerings etcâŚ
It is similar to sales. Take a product that sells for $20, for example. Raising the price to $30 (to increase profits) is not always the best choice. Sometimes, you might find that lowering the price to $10 will actually result in greater profits. Sometimes, it works the opposite way. Sure, your profit-per-unit is smaller, but your units sold goes through the roof. Regardless of what it is, it starts with asking the question and testing things to find out.
Honestly, it is probably the liquidity providers or other groups that are the greedy ones and have the real power to change things. They probably control the spreads entirely in most cases. After all, what value is a broker that does not offer leverage trading? They are probably at the mercy of their LPâs. If a brokerage has enough capital to fund its own traders without outside help, then they can likely offer much, much better terms and have more control over everything from commissions to spreads and swaps etcâŚ
So, if we know the âwhoââŚas in who has the power to bring about change, the question becomes âhowâ. How do we make that happen? Or is it âwhyâ? I mean, why would liquidity providers want to negotiate better terms for traders if they do not have to? I suspect that they would not. Greed wins again. I would hardly compare liquidity providers with someone âtrying to make a livingâ. Call me cynical, but I care enough to ask the question.
