Day in the life in a B-book broker

It's 10 00 AM in a big corporate office in Cyprus or Malta, and American rap music plays in the background while everyone listens to it with their daily macro session of caffeine.

The people who listen to it have no idea about fund management, financial markets, or anything in between, and all of them knows that the company they work for is like a casino, even if it's represented as a financial markets company.

Most of these people in sales team, whether retention or conversion, had no other employment opportunities and so that's why they joined B-book brokers with Cypriot (CySEC) and Maltese (MLTS) licenses and these are the ones who attend by phone and email to the unfortunate dreamers who open an account with them.

These brokers advertise heavily in football teams and in internet with advertising that shows how easy making money with CFDs is. And all of these people working here knows that mostly everyone lose money with this activity. They will never, absolutely never recommend their loved ones to become a client.

Their offices are not open to the public, which means that clients cannot go and visit them, and they do not operate from the countries in which they offer their pseudo financial services.

Most of them are in Cyprus and Malta. Many times their offices are in the name of entities that have no synergy with the commercial names of the brokers they represent.

Their objective is to get as much money as possible in deposits from their clients because they take a fee per deposit as well as per opened account. In general, around a 1%-5% of deposits, as well as a flat fee.

This business model works because the company is operating with a B-book model and benefit form client losses. Due to more than 90% of them will lose everything because of lack of quality training, it is the same business model than a casino.

B-book brokers are characterized by having a category in their income statement called P&L revenue (if they are a public company), which is basically the profit from clients' losses, as opposed to an A-book broker, whose profits come from spreads, swaps, guaranteed stops, and additional premium services, including certain commissions on certain alternative products.

These brokers are characterized by targeting the mass market, and not professional, sophisticated, financially savvy and knowledgeable clients.

You will see them advertising on soccer teams, and everything characterized for the mass market, although CFD, token, futures, or even spot fiat products, are not products for the masses, but for intellectually sophisticated people with ambition and drive.

For example, the shareholding of some of the biggest CFD and FX brokerage firms is full of gambling executives and investigated crooks. And not only do they take your loss, but they target the financially illiterate, young, dreamy client.

A lot of people who have worked in these kinds of companies have been even traumatized about the lack of ethics and how can B-book brokers be legal with licenses such as the CySEC. Cyprus and Malta are basically the mafia islands of Europe, and they target all the world with their services.

It's much smarter to work with professionals in the industry.

Francisco F. De Troya

Algorithmic trading & derivatives professional.

Executive Chairman, Blockmas

How To Invest in a Portfolio of Trading Systems?

Almost all retail traders lose all their money in less than 90 days by applying discretionary trading strategies. Successful traders invest in a decorrelated portfolio of algorithmic trading systems. In this small ebook we dive into how to analyse trading systems, how to invest in them, and how to build a portfolio of institutional grade algorithms.

The Dark Side of Brokers, And How To Win Them.

Most CFD brokers and derivatives firms profit from their clients' losses by being their counterparties and do everything in their power to make them lose their funds as quickly as possible. In this small ebook, our founder, Francisco F. De Troya, who worked for 3 of the largest brokerage firms in the world, exposes how the industry works and how you can really get the best results in the financial markets with algorithmic trading.