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Old Apr 30th, 2012, 02:32 PM   #7
IB-AN
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Join Date: Aug 2006
Posts: 85
Quote:
Quote from sxm:

Well, the IB risk disclosure summs it up nicely:


As far as I understood, before, you got the best prices from several dealers, IB didn't make money off of you, thats why they charge commissions. Now, they do make money off of you, additional to the commissions. If the spread stays small, that might not be a problem. But the conflict of interest remains.

I was just wondering if other people see that as a problem or at least as a loss of quality regarding forex trading.
There have been no changes of the type you suggest to IB's spot forex model. We do not charge a mark-up or change the spread as quoted by our liquidity providers and only charge a commission.

While it's understandable that one might draw that conclusion based upon a reading of the disclosure document, please note that this document contains specific disclosure language which the NFA requires for all member forex dealers. As example, the classification of IB as the counterparty to each customer transaction is a legal distinction, although in practice that transaction is fully offset in terms of both quantity and price with the liquidity provider supplying the quote. In effect, it's a matched book with IB the legal counterparty to both sides.
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Old Apr 30th, 2012, 03:03 PM   #8
gmst
 
 
Join Date: Jul 2011
Posts: 4,357
Quote:
Quote from IB-AN:

There have been no changes of the type you suggest to IB's spot forex model. We do not charge a mark-up or change the spread as quoted by our liquidity providers and only charge a commission.

While it's understandable that one might draw that conclusion based upon a reading of the disclosure document, please note that this document contains specific disclosure language which the NFA requires for all member forex dealers. As example, the classification of IB as the counterparty to each customer transaction is a legal distinction, although in practice that transaction is fully offset in terms of both quantity and price with the liquidity provider supplying the quote. In effect, it's a matched book with IB the legal counterparty to both sides.
Thank you very much for jumping in and clarifying. That disclosure was leading to all kinds of questions. Now, I feel much more confident.

Just for being absolutely clear, you are saying IB will continue to follow NDD, STP model especially for the trades that clear on IDEALPRO. So, no skewing of quotes or different prices to different clients as disclosure says is possible. Can you please confirm? Thanks in advance.
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Old Apr 30th, 2012, 06:20 PM   #9
IB-AN
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Join Date: Aug 2006
Posts: 85
Quote:
Quote from gmst:

Thank you very much for jumping in and clarifying. That disclosure was leading to all kinds of questions. Now, I feel much more confident.

Just for being absolutely clear, you are saying IB will continue to follow NDD, STP model especially for the trades that clear on IDEALPRO. So, no skewing of quotes or different prices to different clients as disclosure says is possible. Can you please confirm? Thanks in advance.
Correct. This disclosure has no impact upon quotes.
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Old May 1st, 2012, 08:36 AM   #10
Options12
 
 
Join Date: Sep 2011
Posts: 550
Quote:
Quote from IB-AN:

There have been no changes of the type you suggest to IB's spot forex model. We do not charge a mark-up or change the spread as quoted by our liquidity providers and only charge a commission.

While it's understandable that one might draw that conclusion based upon a reading of the disclosure document, please note that this document contains specific disclosure language which the NFA requires for all member forex dealers. As example, the classification of IB as the counterparty to each customer transaction is a legal distinction, although in practice that transaction is fully offset in terms of both quantity and price with the liquidity provider supplying the quote. In effect, it's a matched book with IB the legal counterparty to both sides.
Is Timber Hill one of your liquidity providers? Thanks in advance.
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Old May 1st, 2012, 06:29 PM   #11
Hurricane
 
 
Join Date: Jan 2003
Posts: 766
Here's a list of the liquidity providers for one popular currency pair (EUR.USD) as listed on IB's website. Barclays, Bank of America, Citibank, Goldman Sachs, etc. Timberhill is not listed but IB is. I believe this is because another IB client might be on the other side of the trade.

IDEAL, BARC2FX, BARCFX, BOAFX, CITIFX, CSFX, GSFX, HSBCFX, IBFX, IDEALFX, JPMCFX, MSFX, NATIXISFX, NOM2FX, NOMFX, OTC, RBCFX, RBSFX, UBSFX
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Old May 1st, 2012, 06:36 PM   #12
Stok
 
 
Join Date: Sep 2003
Location: Dallas
Posts: 803
Quote:
Quote from Hurricane:

Here's a list of the liquidity providers for one popular currency pair (EUR.USD) as listed on IB's website. Barclays, Bank of America, Citibank, Goldman Sachs, etc. Timberhill is not listed but IB is. I believe this is because another IB client might be on the other side of the trade.

IDEAL, BARC2FX, BARCFX, BOAFX, CITIFX, CSFX, GSFX, HSBCFX, IBFX, IDEALFX, JPMCFX, MSFX, NATIXISFX, NOM2FX, NOMFX, OTC, RBCFX, RBSFX, UBSFX
You have a link to this?
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