SNB fallout highlights danger of agency only models
Reported losses follow the SNB's currency peg removal
The diverging fortunes of retail brokers in the wake of the Swiss National Bank's (SNB) decision to remove its EUR/CHF currency floor on January 15 appear to be largely due to whether a company operates an agency or principal execution model.
Brokers relying on agency only models have suffered steep losses and in some cases, such as FXCM's, there were emergency cash injections. In contrast, principal brokers that act as counterparties to client trades came out of the shock event with flying
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