Thursday, September 01, 2011

Be Aware of Bucket Shops

Forex Bucket Shop

Here are the bad guys we keep mentioning earlier. Bucket shops are fraudulent brokerage firms that "book" a client's orders but never really execute them on an exchange.

Have you ever seen Boiler Room?

Aww come on, don't tell me you missed Ben Affleck's legendary speech about money?!
"They say money can't buy happiness? Look at the smile on my face. Ear to ear, baby!"

And it's precisely this greedy money-oriented philosophy that drives the people operating bucket shops.
They're named such because these brokers used to put their clients' phone-in orders in slips then dropped them (the slips, not the clients) in a tiny bucket instead of actually executing them.

Without the real transactions, the client is actually betting against the bucket shop operators who are also known as bucketeers.

These bucketeers do not usually disclose the real price of the asset their clients are trading, which means that they can lie and tell the client that the price has moved against them even when it really hasn't.

But thanks to the invention of the internet, clients now have a way to tell whether their broker is cheating or not! Thank you again Mr. Al Gore. You are so awesome.
So before you deposit your money with just anyone, make sure to do your espionage so that you avoid fraudulent brokers and forex scams. Mind you, there are plenty out there and we'll look more into that later on!

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