Kevin Samuel783_ Gonzalez

View translation

What is internalization in forex brokerage?

Internalization occurs when a broker fills client orders using its own inventory or by matching with other clients, instead of sending to external markets. Benefits: faster fills, reduced costs. Risks: conflicts of interest, as brokers may profit from client losses. Institutions accept internalization when transparent; retail traders should confirm whether brokers use STP/ECN or dealing desk models. Internalization explains why spreads can be tight yet execution questionable. For traders, the key is understanding execution model transparency.