How to check your broker's access to the exchange and the correctness of quotes in the terminal yourself
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As well as the license, access to exchange instruments and the correctness of interbank forex, CFD and binary options quotes are important to check to ensure the integrity of the company.
It is good form when a financial company informs about its partners on its website. Stock brokers and management companies mark on the map which markets they have access to and what commissions are charged for working with different instruments. Forex brokers, binary options and CFD trading platforms present their sources of quotes and fully disclose the terms of transactions.
To check the entry of a broker or a company offering to invest in portfolios on the exchanges, it will take more than 5 minutes. To clarify the quotes of a forex broker, BO or CFD platform, you need about 30 minutes and an activated terminal of the service provider, in the correctness of the charts of which you want to make sure.
The service provider must first verify the client and then send the user instructions on how to top up the deposit. It must include the details of the legal entity that allow the transfer to be made both online from a smartphone and offline at the institution's cash desk.
How to check a broker's or management company's access to the exchange
Let's start with the theory: to invest in securities and claim high returns, you need an intermediary. A broker, management company or other trading participant is the link between the owners of capital and the exchange, without which nothing will work. Investing in Gazprom shares is a popular advertising offer in 2021. You can check whether it is really possible to buy real shares on the exchange through the company that is advertised.
On the official website of the exchange you can make sure that the company is or is not a participant in the trades. Depending on the declared instruments and markets, visit the resources of different exchanges.
How to check the correctness of quotes in the terminal
Again, a bit of theory: the program in which you give buy/sell orders is called a terminal. It is connected to the broker's server and displays a stream of quotes, which is formed on the basis of provider prices. These quotes are an indicator of the current market.
Forex brokers and CFD or binary options trading platforms buy quotes from large intermediaries: Thomson Reuters, Leverate, Electronic Broking Services (EBS), etc. Depending on the intermediary and its time zone, quotes may differ from broker to broker.
Unlike checking access to the exchange, you cannot check the validity of the broker's cooperation with a particular provider. They do not publish lists of partners who buy interbank quotes.
Answers to frequently asked questions on the topic of exchanges and quotes
It is also appropriate to address the theory of trading within the framework of this article. Below you will find answers to questions about trading instruments, price flow and service providers.
Trading CFDs is practically no different from working with real securities (stocks, bonds). However, it is important to understand that when choosing CFDs
How is buying CFDs different from buying stocks and bonds?
- the trader does not receive the exchange asset into his own ownership and enters into a contract only regarding the price,
- which means that when buying CFDs you should not expect to earn money in the form of dividends,
- CFD traders play against each other or their trades are opposed by a broker.
The CFD instrument has its advantages: no need for qualified investor status, a small deposit is suitable, no restrictions on short positions, no need to install a heavy terminal. However, CFD has its disadvantages: increased spreads and commissions, huge leverage, no dividends. A serious nuance: a CFD broker can act as an opponent in transactions, i.e. it benefits from clients' losses.
Real securities are for investment, CFDs are for speculation. According to average data, 65-88% of traders lose money on CFD transactions.
Checking the legal address and licenses is the most important step. Then comes the assessment of the website, trading conditions and/or capital growth, methods of replenishing the account and withdrawing funds. Reading the client agreement and other documents is a mandatory step before starting cooperation. It is also important to check the company's contacts and the quality of support. Familiarization with the opinions of the broker's or management company's clients also requires attention. Do not rush to replenish the broker's account or invest money in a portfolio collected by the management company. Choose a reliable service provider with the help of SCAUD experts.
