Like most market makers, FXCM's revenues come from five main sources:
The Spread - The difference between the spread FXCM quotes to clients and the spread FXCM receives from the banks they offset from. If FXCM is unable to match a buyer and seller internally, FXCM will, after the positions become sufficiently large, offset with larger banks that quote them cheaper spreads.
Internal matching of client trades - If the spread is 3 pips, and FXCM is able to match a buyer and a seller internally, they collect 3 pips.
Interest on client deposits (like most online brokers, such as E*TRADE, these are a dependable and large source of income)
The firm's own speculative positions in the market.
Losses on clients' trades that were never offset.
Not all of the above apply to FXCM's "no-dealing-desk" trading option. In this set-up, trades are routed to other interbank market participants. FXCM then may not derive income from source two through five. This allows clients direct access to bank liquidity. However, all trades are still cleared through a dealing desk of some type as all banks have dealing desks.
source:- wiki
