I have a general question, say you get a point that your trading 100 million positions. Can you easily do it? I'm trading 10 million spots with ib, a bit of a hassle placing two orders, but I can't imagine what happens when you continue scaling up/ What do currency based hedge funds do? Switch from Forex spot to currency futures? I also seem to find TWS a bit more robust then many of the other forex solutions.
I don't know if anyone is willing to answer any doofus questions but if you buy a currency futures contract, is it still 24 hours a day? Do you have to exit positions from London or other overseas exchanges if you're in North America and it's 2AM? If you need an international broker, is Interactive Brokers the only one that can do that?
curr futures are traded on CME, so look there if they close the GLOBEX at some point in the day (dont think so) i trade those futures from 7:00 ion the morning London time until 9:00 pm in the evening
FX spot does >1 Trillion a day. FX Futs does 100 Billion a day. How is futures able to handle more volume than spot?
Blotto, Thanks a lot for your detailed reply. I gather few very interesting observations from you viz. 1. Going through ccy futures on majors is a very good point indeed, provided If I can get 25 bucks in one go in futures markets (duing London hours) at a one pip spread that will be great. I haven't looked really at ccy futures, but will look at them tomorrow to see the liquidity. 2. About getting credit lines with banks, and doing 40 buck size in one go can be another solution. I might be able to do it. Any idea what kind of spread we are talking about on majors EUR, GBP, CHF, JPY during london/ny hours for 40bucks size and say 70 bucks size from banks. 3. Now, I am getting closer to the point where I might be able to go via EBS/Reuters route, and since I am concentrating primarily on majors, I do not have to be concerned too much about crosses and exotics at this stage as ccooper said. To answer your question, basically I am looking at doing size during open and close it after few hours or so, strictly closing positions within 12-14 hours. Sometimes, it will be very feasible for me to enter in slices of say 2-5bucks each over EBS etc. over a period of 5-10 minutes, but at other times I will like to ideally get done in under a minute. I think then having a credit line set-up with few banks and doing trades in OTC market might be my best bet. If everything goes as planned, I will explore ,more and report back on my findings. Thanks for your pointers!
ccooper, Thanks a lot for sharing your experience. I understand liquidity on EBS is a function of your prime bank and who you are. But I am not sure what you mean when you say on EBS also I will get done in 1-2 mil size only. Last I checked, I know that trades get done upto 20 mio per trade on EBS. Do you mind please sharing EBS order book view for us to see? If its not possible, never mind please. Just wanted to see how liquidity looks like on EBS, via your entity. Also, would you have an idea of what spread I will get charged in interbank mkt for getting done 40 or 70 bucks size in one clip on majors EUR/CHF/JPY/GBP ? Also you mentioned you trade at multiple venues, can you please share where all do you trade and pluses and minuses of various venues, please don't worry if I am asking for too much information. Just that this kind of detailed info will help me and other members make a more informed choice. Thanks a lot for your help!
Elitist trader, thats a good suggestion. Thanks! will look into it, it may actually work during off-peak hours.....hmmm Achillis28 - I checked platform of Duca, seemed to me like phantom liquidity and liquidity at NBBO is pretty bad like 1-2 bucks, IB is far better than that. Another thing is I didn't like the platform, seems very unstable to me, and I am not sure if my clients will be happy with keeping my funds with them. But who knows if I hear otherwise, I might consider them more seriously. loltrader - yeah, I have heard good things about Newedge, havn't checked them though. Can you please elaborate more on your experiences. Thanks for that! Moarla - I really want to get some feedback about CAX model. Seems very scalable and attractive from their website. But it will be helpful if some user can elaborate on the actual day to day behavior of CAX etc. Maybe after I am done setting up the business, I will just call them up and ask for a demo.
cstfx - yes, I hear you on getting the limit changed with IB. yes, I am set up as an institution, I will talk to them. Here, I am just trying to explore what will the optimum solution over the long-run.
Just FYI, here is a good book about execution tactics. Even for a manual trader its interesting to read, and its very readable even for non-quants. FX is well covered too. Might be of interest if you trade that large.