Pure agent against market maker

Discussion in 'Forex Brokers' started by milstar, Jul 14, 2005.

  1. milstar



    Which of competent person can compare
    pure agent as hotspotfx.com with
    market maker's a s oanda,interbankfx.com ,ib ?

    hotspotfx offer "depth of the market " with
    sales/volume and time ,but author suspect it is
    only some of IMM part .

    eur/usd is 1-2 pips ,changed through time
    + comission fees 3 $ .

    From this point of view oanda eur/usd 1.2-1.5 spread
    can be suspected as not relevant in each time to
    interbank spread . Or ?

    Author would very pleased for comment ....
  2. Steve_IB

    Steve_IB Interactive Brokers

    Please note that IB's FX is as a pure agent not as a market maker, so is more similar to HotSpot than Oanda. Our FX is just like an exchange, and works on price/time priority. You can also interact with the market, i.e. you could play market maker.

    An agent platform has greater transparency, as everyone has equal information, and competes on price/time priority. Anyone can trade with anyone. No-one can see the others stop orders.

    With a MM platform the MM can see every customer orders and stops. However, customers can only see the MM's quotes, and cannot trade with each other.

    Example, lets suppose the current market in cable is 1.7580/1.7582.
    If you bid 1.7581 then with the agent model, the market now becomes 1.7581/1.7582. If someone now places a market order to sell you get filled at 1.7581.

    If you placed a 1.7581 bid with the MM model, then the market would remain at 1.7580/1.7582. If another customer now places a market order to sell, he would get filled at 1.7580 - even though you are 1.7581 bid. You would not get filled until the MM brought his offer down to 1.7581.

    The main advantage of the MM model, is that these firms allow you to trade tiny amounts, from $1 upwards, whereas with IB there's a $25,000 minimum (at 50:1 leverage you sill only need $500 to do this), and other agency platforms are often $100k+.

    Hope that helps.
  3. milstar


    Dear Mr.Steve

    If auhtor understand cotrrectly minimaly trading is 500$
    or today by margin 0.02 approx 0.2 lot for eur/usd .
    500 /(121000 usd * 0.02) = approx 0.21

    2. 0.02 is initial margin and 0.01 is liquidation margin ?

    Can be obtained initial margin 0.002 for intraday small
    operator with two order praxis
    / Order open position sended together with order
    automatic stop loss = 4-6 pips/
    Liquidation Margin 0.0016 can be obtained from mgforex
    250$ for 1 lot gbp/usd .But mgforex as non pure agent
    give not possibility to win spread as hotspotfx promouted .

    Author would very pleased for answer.
  4. good luck, Mr. Steve!

    I found this interesting, actually. I've always figured all the forex shops were bucket shops, but you're saying that at IB you can go straight into the interbank mkt, is that right? Perhaps you can clear this up for me.
  5. milstar


    Dear Mr. Steve

    In another thread you mentioned ,that your company give
    not possibility to be present on both side's of the book .
    Paper game test by eur/usd futures with depth of the market
    real time quote give result approx 100% per day /with great risk of full wipeout in case of spike on news/ through tactic
    of winning spread ./10 usd - t.c./.AS you knew this tactic can
    be usefull for agent as your company /200* t.c. for one lot per day /

    Hotspofx promouted possibility to winning spread on he's
    Your company ?

    Exist possibility of opening multiple windows witd different
    order value and very speedy/0.1sec/ order entry and killing
    all orders in parts and all ?

    Did your company warranted stop loss in time of great volatitiliy ? As matter of the fact legacy firm as REFCO/FXCM
    not .

    Author would very pleased for comment ...
  6. Steve_IB

    Steve_IB Interactive Brokers

    Sorry but I'm not exactly sure what you are asking. I'll give it a shot:
    -Margin on currencies is 2%, except for JPY and HKD which is 3%.
    -Minimum trading size on IDEAL-Pro is $25,000, which at 2% means you need $500 in margin.
    -You can set-up a limit order with an attached stop.
    -You can also set-up a bracket order, which consists of a limit order to buy (or sell), with an attached sell stop (loss) and attached sell limit order (for profit taking).
    -You can act as market maker, i.e. you are able to post a bid and an offer at the same time.
    -You can see the market depth.
    -No we do not guarantee stops at your stop price. It will depend on market conditions.
    -Booktrader can be used for very speedy order entry and cancellation
  7. Steve,

    Sorry, but I would not characterize something like this as usable "market depth":


    This was taken just a couple of minutes ago. What's more disturbing, and contrary to your earlier remark, this does show at least some customers' orders and stops, even though they are placed far from market. How come?
  8. Steve_IB

    Steve_IB Interactive Brokers

    It doesn't show customers stops.

    What more do you want from the depth - it will show the various quotes from the banks at the time.

    You only need depth if you're trading more than 3m an order, as that is usually the minimum size displayed at the inside market. Other than that the market depth is pretty useless, you can't use it like some people use Level 2 for stock trading. There is also alot of depth not displayed, for example a bank maybe quoting 3m, but if this was taken out they usually refresh the quote immediately.
  9. milstar


    Dear Mr.Steve

    Author is very pleased for your message.

    As you stated "... you can not use it as Stock Level 2"

    From author point of view

    FX Spot Level 2 , Order 160 lot's , Margin 0.02 ,SL not warranted Paper game result ? with tactic win spread ?
    risk -unexpected volatility

    EC future FX level 2 order 50-100 lot's *125 k 9.30-12.00
    ET ,008 margin possible ,SL not warranted ,paper game result
    with depth of the market 100 % ,speedy entry and kill of all
    order's possible .risk - unexpected volatility.

    Did your company have any operator paper game result
    with Depth of the market real quote 100%
    with tactic "win spread" ?

    Author suspect that dynamic of spot and futures is different
    and for small operator futures market more suited .

    Author would very pleased for answer.
    Excuse me,if request is not relevan´t.
  10. Steve_IB

    Steve_IB Interactive Brokers

    I'm not too sure what you mean by the win spread tactic. If you mean by playing market maker on both sides of the spread, then you could do that with either futures or spot. Although futures would probably be easier to get filled as there are more market participants.

    Nevertheless if you're trading Eur/Usd then that's going to be difficult as it's usually a 1 pip spread with both IDEAL-Pro and Globex. If you have an account with us, then I suggest you just display both the futures quote and spot quote and compare them side-by-side for yourself.

    (We don't have any paper game/trading, just the TWS Demo, which is suitable more for understanding our trading platform, rather than for paper trading).
    #10     Jul 19, 2005