This article has been translated from English to Gen Z Slang.
Bruh, did ya catch what was happenin' with the A-Book broker in those OG examples in the last lesson? Your A-Book buddy there defo wasn't makin' any bank. 🤔
They laid it out like that so you could see how the broker was getting rid of any market vibes that might harsh their mellow. 🤑
Alrighty then, so how do A-Book brokers get that bread?
Unlike them B-Book guys, an A-Book broker doesn't pull a sneaky and make coin when you catch an L on your trades.
A-Book broker ain't just out here for the good vibes. It's all about that moolah, fam.
Gettin' the deets on a broker's hustle helps you figure if they're on the same wavelength as you or nah.
Let's break it down about how A-Book brokers stack some bread once all the risk transfer is a done deal. 📚
How A-Book Brokers Make Their Dough
So when your broker goes all A-Book on 'ya, if you hit “Buy” on some asset (say, like, a currency pair), check it:
- They low-key sell you the asset, could be at the OG price they get from their LP (add “commission”), or just slap a markup (and chill on the commission). Then...
- They skrrt over and buy that currency pair from their LP so it vibes in their own trading book.
If your broker's doing the no-risk boogie, here's how they roll in cash:
- Commission
- Spread Markup
Cash, I Mean Commission
In the earlier deets with Elsa (our degen trader) and the broker, they both had the same start and stop prices.
The broker’s hustling with extra fees on Elsa's trades, a.k.a commission.
Usually, commissions flex based on the size of your trade – and word, it ain't the same everywhere.
They might charge per lot, per milli USD, or it's a slice of the trade volume pie.
Like, one broker’s tax might be $60 per $1M or $6 per big-boy lot.
If your broker is lit, you might get a commission discount with some fat trading volume. You skid around more, they cut you bigger breaks. 🙌
Example time: Trade over $100M volume a month, and your usual $60 per $1M charge might drop to $40. High key savings vibe. 🌊
Spread Markup – Sneaky Bread-Money
The other sneaky way for A-Book guys to make it rain money-wise is slapping on a price markup – you know, spreading that markup bread.
This is when the broker chucks a lil' extra on the bill they've got for ya. 📈
They earn because the LP deal prices ya broker gets are better than the prices they serve to you.
The difference is ya buddy, markup, similar to what your grocery boss outside would tag on food prices.
This store stun payin’ wholesale prices and selling you that retail flair instead. Cashing in on that margin, bruh!
Trust, that's how your fave grocery pads its wallet, by hand-delivering your food supply.
Otherwise, they'd be looking kinda broke.
Same crew vibe happens with A-Book brokers. In trade for letting you flex on currency speculation, they skim off via price markup.
Getting cushy "wholesale" prices from LPs, selling that currency flex at "retail" price to ya.
Lowkey, A-Book broker's just your liquidity plug! 💦
Let’s check out what it all entails, ya dig?
Price Markup Scene: Buying EUR/USD
Peeps, in this scenario, the broker spits out a price markup of 0.0001 or just 1 pip.
Our trader Elsa is going long on EUR/USD at epic 1.2001.
She’s lockin’ 3,000,000 units or throwin' down 30 standard lots. Peep...a 1-pip move here stacks up to $300.
Notice the strategy: The broker cops lower from LP but flips to Elsa at a higher markup.
His buy price from LP was sitting sweet at 1.2000, while Elsa got handed 1.2001. Prime time scripting right there – the legendary 1-pip markup.
When Elsa jets her trade, the broker does another slick markup dance maneuver.
The broker swoops higher sell value to LP than what Elsa pays. Criminal mastermind stuff. 😆
Scenario #1: When EUR/USD Spike Town
So, plot twist: EUR/USD levelled UP!
Elsa click-a-clicked a 98 pips profit, whoosh, her broker made no sweat, catching an equivalent price red card. 😳
But the broker slayed in another sly deal with an LP, banking 100 pips profit, flipping the situation to full send city against LP, who scored a -100 pips red screen.
Profit bagged exceeded losses in Elsa's story (thanks to our villain markup)…banking a solid 2 pips profit, equaling $600 ($300 lush 2 pips).
Elsa’s a winner—it didn't turn the tables on the broker.
They quickly flung market risk to life partner LP, maintaining zero losses on Elsa's cash clutch victories.
Scenario #2: Unlucky EUR/USD Dive
Let’s peep what shakes if EUR/USD falls and through Elsa’s USP is declared a loser. 🎢
Open trade fairy: Artists Elsa spins a long fantasy EUR/USD creation at bursting 1.2001
This one’s pullin' off a monster size 3,000,000 units, doin' time between 30 standard lots, pegging 1-pip worth $300.
Bam slam, EUR/USD tanks hard.
Elsa's sixth sense says bail; fast-forward, slides at 1.699, finalizing a ⬇302 pips or $90,600 bill ($300 splashin' down 302 pips!).
So, this turns the tides making Elsa's brokering buddy score equivalent candy land. 🤷♂️ But bro-love with LP— 😭 states LOSE ⬇ 300 pips gain snatched by LP.
Cashing through Elsa’s mischief saves real 2 pips for broker, totaling $600 ($300 via 2 piff-piffs).
Notice, broker’s bottom-line chill – same all whether EUR/USD rollercoasters up or sinks. 🤯
Ping-ponging that risk off to the LP, bro saved crashing down – preserving the missed huge 302-pip gain off pure internal blah.
Perks of betting hedged mode.
Fancy a glance at the hedge payout? Rugged individualism shines: no Wham! zap on price roulette plays. You're playing price markup dominoes, not actual street parade end games. 🎉
Like books rock dotted, A-Book brokers are chillin' game legit but not hustlin' losses or gains from your flip-flops—they juice spread flip and commission stack!
Cashing even when market magnets swing—no influencer interference (even when peeps win or dodge). 🎯
Yet, let's not forget ya backend needs to act hype-ready for acts smash hedging fast or bugless. 🤓
How A-Book Brokers Grab Cash
A bootcut casual model revealing $$ A-Book dial:
Sneaky Spread Markup Drill
Sample hit: How about computing da coveted “spread markup." 🧠
Stereotypically, raw institutional spread on EUR/USD beaver’s honkin’ at 0.1 pip—A-Book fam shells straight faced for it.
A-Book position plus volume penalty’s ticking the broker’s expense check.
Where’s EUR/USD at? Around $2 per lot, throwing the missing stack fix-up onto 0.2 pip.
Have balance scales? ⚖ TikTok time:
0.1 pips + 0.2 pips = 0.3 pips
Simple as shopping spree-day buzz, retail market swing EUR/USD aesthetics, hold on to 1 to 1.5 pip, meshed with A-Book fancy cost coding rubberdowns 0.3 pip. Slap' stackmin $10 markup? Heard iSay, bow style excess cumulative 1.3 pips, retail floor declaration.
T-ready maximizes cycles ... MVP bill $13 per lot/wholesome appetite, $1.30 minilots, $0.13 streamlined enrolls
Whatevs, every lot bingle, broker loops, merge 💲10 USD. Whoop! 💸
| Liquidity Provider (Raw Spread) | Trading Platform’s A-Book Volume Fee | Broker’s Markup (pips) |
Retail Spread (pips) |
Retail Spread (USD) | Income on each lot (pips) | Income on each lot (USD) | |
| EUR/USD | 0.1 | 0.2 | 1 | 1.3 | $13 | 1 | $10 |
| A-Book Transaction Fee | 0.3 | ||||||
Microband? Mini lot friend rounds pulling $1.
| Liquidity Provider (Raw Spread) | Trading Platform’s A-Book Volume Fee | Broker’s Markup (pips) |
Retail Spread (pips) |
Retail Spread (USD) | Income on each lot (pips) | Income on each lot (USD) | |
| EUR/USD | 0.1 | 0.2 | 1 | 1.3 | $1.30 | 1 | $1 |
| A-Book Transaction Fee | 0.3 | ||||||
Micro morsel spins some sort of grandeur glory 💪 each clock micro vibe-fat-grab churns just $0.10!
| Liquidity Provider (Raw Spread) | Trading Platform’s A-Book Volume Fee | Broker’s Markup (pips) |
Retail Spread (pips) |
Retail Spread (USD) | Income on each lot (pips) | Income on each lot (USD) | |
| EUR/USD | 0.1 | 0.2 | 1 | 1.3 | $0.13 | 1 | $0.10 |
| A-Book Transaction Fee | 0.3 | ||||||
Low-task note: DIY A-Book crew barely coughs mini mile on $1 packed hood-opening queen flips with 10,000 units in ha-ha fun 1 foot tap foot micro slashing $0.10!
Ever watch lil' guy attractin real hair-crying tiny guru tides? Breathless trying minimal gigs leaves my girl crew skirting larger diamond price swaps solos.
Monthly A-Book Revenue Vibes, Brethern
Put juiced numbers blinking eye! One A-Book rolls mega moguls monthly if followers circle mini lot hikes.
| No. of Customers | Mini loads per month, per pal | ||
| 5 | 10 | 30 | |
| 100 | $500 | $1,000 | $3,000 |
| 500 | $2,500 | $5,000 | $15,000 |
| 1,000 | $5,000 | $10,000 | $30,000 |
| 5,000 | $25,000 | $50,000 | $150,000 |
| 10,000 | $50,000 | $100,000 | $300,000 |
Year-on-Year Flex Mode
Cosmical roll vibes months saute! Reel a pelegraph besting throughout, yet solid like concreteBach HQ ICONIC trailing trend force Mungalot interventions 🤖. Starlite ☄ figures rollin' topline!
| No. Squad Activity | Mini wiggles async monthly flows | ||
| 5 | 10 | 30 | |
| 100 | $5,000 | $12,000 | $30,000 |
| 500 | $30,000 | $60,000 | $150,000 |
| 1,000 | $60,000 | $120,000 | $360,000 |
| 5,000 | $300,000 | $600,000 | $1,500,000 |
| 10,000 | $600,000 | $1,200,000 | $3,600,000 |
Pumped, now handle spies ya glitch read áit filled pipeline, squaring cord metasurround 💾 data followers fasten mas quick minute dorm nods surrounded market slip angle...
A-Book game dynamics kinda bet aligned to profit-pouring da heavy reload barrels... 🚀 covering champs! Meanwhile advocates argue modeled axis rotating costs pressing floods meet brokers audience situation...stay pure headzones sliders cooperate customer esercisek... micro glass negative mistrust & belay— float upwards Excelsior triple power connects azwise fall... 🌀