I am shopping around for an FX ECN broker to use for managing accounts - currently looking at IB, HotSpotFX and Dukascopy. The first imperative is absolutely no requotes whatsoever, even during news or some black swan incident. A market maker's failure to be on top of his game shouldn't cause problems for me. I'm leaning towards HotSpotFX at the moment, but they are slightly more expensive. With IB, pretty cheap but weird consolidation of P&L in various currencies. Dukascopy, well... are these guys really safe to deal with? I have some worries on safety of funds and (lack of) regulation of their business. Currenex seems to be such a crowded area, with no two people offering the same service and liquidity. I haven't explored this much though. If anyone would like to offer opinions or other alternatives, I'd be very interested to hear what you think. I'm trying to avoid using a prime broker. And pls don't bring up regulation or licensing for my part, I'm outside of the US and FX is unregulated here.
Currenex will vary depending on the broker because no 2 have the same banks . But - The Currenex FX trades ECN is rather consistent. The think is some places only have the ECN. If you compare that against another firm it could be about the same. Although - Some firms have both ECN plus they add bank liqudity of there own. But the ECN base is the same. Some only have bank providers. Another alternative is to use both Currenex and Hotspot or another platform such as EBS or Lava etc. through a multiple platform provider. This way you can use both or all of the platforms at the same time. KFX I believe supports this feature on Currenex and Hotspot I http://www.kfx-forex.com/contact.php ATG supports this http://www.aarontrade.com/
Forgot: A friend of mine trades some managed accounts at Dukas and he has complimented there back office a few times. If you are managing accounts a good back office operation is something to keep in mind if you are using multiple allocation accounts. I can't comment on IB for this but once again have heard good things about Dukascopy http://www.dukascopy.com/ on this front.
What sort of numbers are you talking about? 100k, 1m, 100m, more? It's going to make a difference you know. You say you don't want requotes even across data so what would you prefer, slippage? You'll need to be realistic, it's not up to the market maker to fill your orders at prices which don't exist, he's not a charity! Why do you want an ECN specifically, what's wrong with a bucketshop?
There are no requotes on an ECN - there is potentially slippage on market/stop-orders or potentially no fills on limit-orders but no requotes. Requotes are marketmaker only.
Cable is right about the number going to matter. if you are trading in smaller size you could add MB Trading to you ECN list. But if you are doing large size then MB wouldn't be a good fit. If I may ask why do you want to stay away from a prime broker? Just curious.
Thanks for your input, and yes you're right: Backoffice support is very important for managing accounts. Much appreciated.
You're right, size is very relevant: Account minimum 50k usd, AUM about 500k usd, clip size between 1m and 10m depending on strategy on whether it's a short-term or medium-term trade. I definitely prefer tradable quotes, which is exactly what you're getting with an ECN and not with a bucketshop. If the market is 20 pips wide during news, that's what the real market is.
Yes, that's right. I only mentioned it since I've heard various things regarding Currenex as an ECN and then banks having a last look option and you're left hanging or unfilled on a quoted price.
This might be a good option for me, it's just that I have zero experience with prime brokers and don't really know what to expect in terms of market/execution, pricing of their service/financing and also what their minimums are. I think both IB and HSFX offer give-ups to a prime broker - does this mean that you can yourself establish a relationship with various ECNs and then get the trades cleared/consolidated at your prime broker? Are they good at handling the backoffice stuff for managed accounts?