Yeah, it is latency arbitrage. Nothing illegal about that, brokers just don't like it. If it's not prohibited in their terms, only thing they can do about it, is to introduce slippage. Anyway this specific broker not allows it, they even encourage it. When going to their website, the first thing You see, is a popup telling about arbitrage.
Brokers don't like? I love how you get away as a broker calling it arbitrage, scalping, hft..something that sounds dodge. So clearly we all agree something is up if 10000 brokers can trade options no problem but tradeworx struggles. I dunno but my sense is tradeworx are better than an irish man whose only previous experience was back office in bank of toronto. Aside from this the way they make their real money is not in market making (even very slowly at 6 times the width). So brokers are very keen to emphasise that retail traders need protection from evil hft traders on the exchange. They also can do things like charge 2x the equivalent spot position to sell an option (a short option can not have larger moves in USD terms that the same delta in cash even with vol at infinity, they don't understand options becasue they have never needed to learn, its too easy to make money from retail traders apparently), then if their systems screws (common occurrence), their first move is widen spreads to untradeable stop taking client flow then if the margin looks close to the equity start trading out of your account. This can be very very serious if you have offsetting positions and they don't think they need to check since they are helping. They are a disaster. They are extremely costly to you. If you could access exchange liquidity it would help everyone. Banks want it, hedgefunds want the "easy money". Why are people not saying this, why are only brokers allowed to sit there, reducing liquidity with their useless execution systems whilst stealing people's money. Next time you see weird moves think brokers not HFT.
Is latency arbitrage super easy then and iillegal? Is that why they ban all profits, makes sense. How's bitcoin JSOP?
Yes latency arbitrage, that free money strategy which we could all do but don't becasue it's beneath us. You can always make money if you are prepared to go that low. People who have installed mircowave towers at 20mile intervals between london and NY at a cost of 500m/50miles are frowned upon in the broker community.
They make all their money obviously stopping people out when suits hence the random rules. I've had accounts with names like professional, uber-pro, beginner, EU protected, noob. The point of them seemed to be they can't do this because you have so much money on deposit they can't really pretend they are at risk when the leverage they offer v the volatility is so low. In practice the system fucks up starts randomly doing stuff..oh yeah it was signed off by a girl in the credit department but not changed. Getting you money back is hard when someone else steals it though. What if you have a buy and a sell of two forwards. You are paying 20% on both sides for something that can't move. System issue occurs and forwards are risky because of interest rates so the close one out. You can't trade, you don't get told and can't contact them to warn them they are about to lose a lot of money in the interim whilst they are saving you from yourself. Then they wait then close the other one out. But they are not obligated to look at the risk, yet the whole point is that they are supposed to be looking at the risk. Its a fucking joke, I'll show you and it will help everyone to have your orders in competition, because that means you can't afford to give useless fills because someone else would start making loads of money by doing slightly less useless fills. And your deposits can be properly managed by the clearing houses at the exchanges. We don't need 'em, and everybody knows it, i say this every day every afternoon, we don't need 'em, they are the worst problem in the market by far.
No one needs IB's help to get the best execution, i assure its very very competitive out there people are giving better fills than IB, if they were allowed. So no more dissing hft.
Lets see how citadel do when they have other people there who don't get market snapshots at 1ms intervals and see if there is so much money in it. We wouldnt want a repeat of the Knight Capital situ im sure its very very different now since they must have improved it alot. I'm sure they no longer need to worry to train their machines against against virtual exchanges feeding them the packets in real time. Why would you do that you can run a one minute interval back test on a CPU, job done. I'm being sarcastic by the way, they don't even have a black sholes pricer.
They are about as good as someone who says a genius business idea is lets instead of offering retail fx at 10 000 times the width in 1k sterling at travelex i will do it fairly. eurusd is 1.13/1.15. Genius why didnt someone else thing of that. clowns
BreakingNews "Servers damaged by illegal traders, brokers profits, claims server damage fault of illegals, advises clients to give orders to him still even on damaged server' The bombshells they fell
So they are basically borrowing money from you interest-free for 5 months then after giving you the opportunity to create that money from thin air by taking advantage of their crappy servers? If so, why don't they just earn it themselves? Strange. What's the broker's name?