Discussion in 'Retail Brokers' started by LeonPhelps, Jun 23, 2007.
Is this some sort of scam, or what?
I can only assume that since you are wondering if this is a "scam", that you are incapable of reading. Try reading it real slow, once more. It explains everything you want to know.
My take on it was that IB is simply trying to introduce it's customers to EFP's and SSF's.
Considering the SSFs move with their underlying, it is more return for the same risk over a long time frame because you reduce margin interest or if you are short, short interest. Theoretically the positions are about the same otherwise. Anyways, it's all explained in the email and OldTrader was only trying to offer a suggestion.
People on here are so defensive and emotional. I hope none of you guys trade like that.
It's not a scam; in fact, it will reduce IB's float-income if implemented by clients. An EFP or conversion arb will beat IB's interest payments by 5 to 40 basis, based upon prevailing spreads. IB gains nothing from a client trading a rate arb.
Agreed. That's why I'm trying to figure out what is their angle.
The angle, very simple --
Huh? They represent a disproportionate % of ibank traders.
Bottom line: the commisions are more valuable to IB than the interest.
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