How does famous worldwide trading make money?
Where does famous worldwide trading’s income come from?
The main way we earn money on our leveraged products – eg CFD trading – is through the spreads that we wrap
around the market price.
The costs of any given trade are factored into these two prices (known as the offer and the bid), so you will
always buy slightly higher than the market price, and sell slightly below it.
If the FTSE 100 is trading at 6545.5 and has a one point spread, for example, it might have an offer price of
6546 and a bid price of 6545.
Sometimes you’ll also need to pay other fees when trading with us:
You can find out all about these on our charges page.
Does famous worldwide trading aim to profit from client losses?
No. Our business model is based on providing individuals with the opportunity to trade the world’s
financial markets, in exchange for fair and proportionate transaction fees. It is a well-known fact that
trading successfully is difficult, and most speculative traders tend to lose. However, we do not typically
benefit from trading losses that an unsuccessful client may experience.
Mostly, our clients offset each other’s positions. For example if client A buys one lot of the DAX and client
B sells one lot of the DAX, both sides of the trade are covered. This means famous worldwide trading is not exposed to
the profit
or loss of either client. Instead, we make our money via the spread (i.e. the transaction fee) that each
client pays to trade.
Sometimes, a large majority of clients will trade in one direction. When this happens, we will protect our
exposure to risk by hedging in the underlying market. For example, if client A and client B buy the DAX, we
may buy actual DAX futures. This then covers the amount we will pay out if both clients are successful.