Not at first glance. The biggest advantage for a scalper to be noticed is when he/she is able to buy/sell/transmit the funds of other traders, which will put their position at high risk.
We already knew when we did the post yesterday about scalpers at the CME’s NYSE exchange that scalpers there are allowed access to forex, which means they can trade to more than one platform. One problem with this is that any transaction must involve at least three parties: the trader, the platform, and the server. So it’s a real risk when a trader is able to transact with his/her own account on several different platforms, thus compromising the security of the transaction.
The good news is that a number of traders in the New York CME exchange have already adopted the same risk-free strategy as well. They use a “scalpel” wallet that can only be used to “scalp” on their own account. That allows the trader to use the funds from his/her account to trade to the platform, or vice versa.
The Scalpel also saves the trader money since there’s no fee that goes with the transaction itself. As a result, the trader has to take a lower margin compared to other people. It’s a risk that no one is paying to take, but it’s a risk that no one can afford to lose.
What should you care about the most when using the Scalpel wallet?
The biggest thing is that you can’t spend the funds without approval by the platform. But it doesn’t mean that you need to be able to spend them. Only in case of extreme circumstances is that you can use the funds without approval, but only in case of extreme circumstances where money is at stake. So you still have to take a higher margin compared to others who also deal with scalping.
A similar risk can be considered as being liable to withdraw any amount of the scalped funds before the platform approves the use of it. This makes you vulnerable to an unexpected event.
What is the scalper’s opinion on all of this “scalping” talk and how has it affected its business?
The scalper community is not large and is very tight-knit. If you asked “what is scalping” in a forum full of traders you would get dozens of replies. But as our community grows we can expect a lot more comments like the ones below:
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