In the world of investments, staggering amounts of money, and potential losses, it is always important to make sure that you know certain concepts that may now be considered to be basic information. For today’s discussion, we’re referring to the concept of the Forex and Binary Options Broker. If you are not familiar with this, we hope that our talk will help familiarize you with it.
Definition
An Introducing Broker (IB) is a lot like a consultant. They are the ones that offer people some recommendations but do not actually do any of the physical trading aspect of it all. They tend to simply delegate any lead that you choose to pursue to the person that would be responsible for the trading floor.
This does not mean that they are any less liable or would not have to be certified or registered with necessary organizations. While stock brokers would usually be affiliated with the SEC and are regulated by the NASD, introducing brokers fall under separate conditions.
They still do need to be registered but they do so under the Commodity Futures Trading Commission which is generally regulated and overseen by the NFA.
Why Are They Needed?
If you aren’t sure how to approach investments but do not know any brokers, IBs are really helpful. Also, they do not just help you; they also are quite helpful in lowering the work load of firms that deal with investments. Brokers are generally overworked in the sense that they need to keep track of several investments by several different people.
If IBs are helping you, they can keep track of things better and coordinate with several different traders so this effectively lowers the workload for several people—yourself included.
With this, we hope that you’ll have a stronger idea of what an Forex introducing broker is. Given this information, would you consider working with an IB for your investments?
