15 January 2011

Where is your money slipping into?

An article in Smart Money Magazine asks whether foreign exchange brokers are cheating their clients by using unfair trading practices when executing orders. This could be achieved by taking advantage of small price differences between the time when an order is accepted and when it is executed. The industry term for this is 'slippage' and denotes a practice that prevents a customer from getting a better price than the one promised to him when the order is taken. The difference is pocketed by the broker.
Investors can be deceived whenever they are not careful when monitoring the execution of buy or sell orders in shares, bonds or mutual funds and should take professional advice in order to protect themselves from being taken advantage of.