XTB is a market maker broker

FACT: The business model used by XTB combines the features of the agency model and the market maker model, in which the Company is a party of transactions concluded and initiated by clients. For transactions on CFD instruments based on currencies, indices and commodities, XTB secures part of transactions with external partners. On the other hand, all CFD transactions based on cryptocurrencies (available in the EU only), Stocks and ETFs as well as CFD instruments based on these assets, are carried out directly by XTB on regulated markets or in alternative trading systems - so it is not a market maker for this class of assets.

Market making is XTB's main source of profit

MYTH: The main source of XTB's profit is the transaction spread, i.e. the difference between the bid and ask rates. Market making is only one of the sources of revenue, accounting for approximately 20-30% on average, and in addition it does not always mean profit - in 2021 XTB recorded a loss due to market making.

A broker operating in the market maker model “plays against” clients

MYTH: Although in the market-making model it is the broker who is the other party to all transactions, regulated brokers such as XTB operate according to strict rules regarding the execution of client orders and are controlled by supervisory authorities in this regard. In addition, thanks to the fact that clients use the services of a market making broker, they can use mechanisms that increase trading safety, such as stop-loss or negative balance protection. It is the broker who takes the exposure to market risk and possible rapid changes in exchange rates.

A market maker broker shapes instrument prices in such a way as to increase its profits

MYTH: Clients have clearly indicated bid and ask rates at all times, so they know the price of buying and selling assets. These rates are always based on the base price of a given instrument, and the execution of orders is controlled by supervisory authorities.

The broker always makes money on market making

MYTH: A broker operating in this model assumes exposure to market risk. Depending on the market situation, broker may therefore make a profit, but also suffer a loss. Revenue from market making is therefore a kind of “risk premium” that the broker assumes.