Question by aerofreak: Why do foreign exchange brokers give away cash when opening an account?
I just opened a micro account with an on the internet forex broker, and they give away 100% of your initial deposit when opening a micro account. I just discovered this suspicious and wanted to know if this is normal, and why brokers would do this?
Thanks in advance!
Would this mean that i have to spend back these US$ 300, or are they “mine” and i spend them back through the spreads by trading?
Answer by Hops Aficionado
Because they know they are going to get it back. Exact same reason why casinos give away free of charge hotel rooms, flights, etc.
When I say get it back, I do not necessarily imply you happen to be going to lose all your income. Forex is high frequency trading, and even if you are productive in your trading they will make their cash back on the spreads.
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