You know how casinos lay it all out, they're taking a gamble just like us? But get this, brokers might just be outdoing them in their own sly way. I’m saying brokers might actually be worse. Why? They’ve got this neat, little setup where they rake in their shares through bid-offer spreads and commissions, all while carrying zero market risk. It’s like having their cake and eating it too, but in secret. We’re all out here rolling the dice, while brokers are the house, cashing in risk-free. What’s your take? Are brokers just silently stacking the deck, snagging a surefire win with every trade we make?
Everything has to do with the business model, you can't compare the business model of casinos with brokerages. Also, nothing is out of risk or expenses outrightly, they have enough to risk and spend money upon as a company. Without going too deep into that, I would like you to know that there are many types of brokerage arrangements, we have market makers, STP, DMA, ECN, prime and many more. All of these arrangements except one are passing the risk of the traders into the raw market pool which makes them out of the trading risk as their customers lose to the market and gain from the market and the brokers are earning through the spread, commission and swaps majorly.
But the market maker type of brokerage is not like that, the broker will be the one paying when the trader gains and gain when the trader loses. Some brokerage arrangements will mix the two together depending on the kind of trader they are dealing with. They would have studied his trading performances over time to know the arrangement that would be best fit for him to the advantage of the company. So, nothing is without risk here and it is the reason why it is difficult for some brokers to pay their big traders at times because they are too small for the arrangement they opted for or it can cause them not to be able to pay many small clients if they have to pay a huge amount at a time. This is why every informed trader will always beware of the internal dealing kind of brokers. If there are too many professional and successful traders in their company, it can ruin them easily if they do not eject them.