ECN, order execution, aggregators, liquidity. - page 14
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
I explained that we have an aggregator, it mixes flows from suppliers.
Let's go over the counting sticks again:
Two suppliers, one gives Bid-Ask 10-12, the other 9-13. We merge these prices into one tumbler and the client in MT prices 10-12 (our commission is 25).
At the same time, the one that gives prices 10-12 takes a commission of 20 from us, and the one that gives prices 9-13 takes a commission of 10.
As a result, our client sends to buy for 12, goes to the first supplier and we pay a commission of 20, we earn 5. This 5 is not enough to cover the costs of the company and we start working at a loss.
What do we do? We put a markup on the first quote and 10-12 turns into 9-13.
As a result, our client sends to buy for 13, goes to the first supplier and we pay a commission of 20, we earn 5 and earn another 10 on the markup (for a total of 15). If he leaves for the second supplier, we pay a commission of 10, we also earn 15.
All figures are conditional.
In this case we do not deceive the client, we show him quotes 9-13, relevant, on which we are ready to conduct transactions. On the other hand, the spread becomes wider, but we do not conceal it from the Client, he sees the spread and has the right to choose another company with a narrower spread.
(Do you, on the contrary, promote the client's limit order?) After all, you don't pay a commission to clients and therefore should move 1 point closer from your example.
What does it mean to pay the spread? There is an offer price to buy or sell. If you are happy with the price, you make the deal.
For some reason you refuse to accept the fact that the trader pays not only the spread but also the commission. So no one will analyse just the spread, there are no fools like you are probably counting on. And in fact the total payment you have is no less than other "non-truthful" ECNs that use the same providers, but show the trader the total payment. Slippage in the plus may sound tempting, but it is insignificant compared to the huge commission and does not make any difference.
The price also includes commission. The price may be good, but the commission can make it completely worthless.
and the client limit order is the opposite of what you're pushing closer?) After all, you don't pay a commission to clients and so should move 1 point from your example.
The price also includes the commission. The price may be good, but the commission can make it completely worthless.
Forget about the spread. There is a buy price and a sell price. Traders set these prices themselves. But the site, which gives traders the opportunity to trade with each other, must receive a percentage. Come to any market to sell potatoes. You set the price as you see fit. But you will have to pay for the market. If you are not satisfied with the price, you can move to another market.
Hmm. Although buyers don't pay for the market.
Question to Rann, is the commission the same for markets and limits?
The broker is completely out of his pocket.
Anyone buying a car from a car dealership would want to be sold for the cost of the car, only then what to pay the salon staff, their offices, etc.
Forget about the spread. There is a buy price and a sell price. Traders set these prices themselves. But the site, which gives traders the opportunity to trade with each other, must receive a percentage. Come to any market to sell potatoes. You set the price as you see fit. But you will have to pay for the market. If you are not satisfied with the price, you can move to another market.
Hmm. Although buyers don't pay for the market.
Question to Rann, is the commission the same for markets and limits?
I explained that we have an aggregator, it mixes flows from suppliers.
Let's go over the counting sticks again:
Two suppliers, one gives Bid-Ask 10-12, the other 9-13. We merge these prices into one tumbler and the client in MT prices 10-12 (our commission is 25).
At the same time, the one that gives prices 10-12 takes a commission of 20 from us, and the one that gives prices 9-13 takes a commission of 10.
As a result, our client sends to buy for 12, goes to the first supplier and we pay a commission of 20, we earn 5. This 5 is not enough to cover the costs of the company and we start working at a loss.
What do we do? We put a markup on the first quote and 10-12 turns into 9-13.
As a result, our client sends to buy for 13, goes to the first supplier and we pay a commission of 20, we earn 5 and earn another 10 on the markup (total of 15). If he leaves for the second supplier, we pay a commission of 10, we also earn 15.
All figures are conditional.
In this case we do not deceive the client, we show him quotes 9-13, relevant, on which we are ready to conduct transactions. Another thing is that the spread becomes wider, but we do not hide it from the client, he sees the spread and has the right to choose another company with a narrower spread.
No, on client limits we earn $25 per million in turnover, which is several times less than what kitchen scheme companies earn. And we are not prepared to reduce that amount either. Just as we are not willing to work at a loss, which I have no doubt our clients would like.