pricing - page 22
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>> Why are you guys all doing in a branch called "pricing (in Forex)"? Why don't you just go there and make some money? Why are you hanging out here, reading my ....? Mm-hmm... What's the point of wasting your time? Where's your logic?
What are you doing here? You haven't said anything clever about pricing yet, where's the logic?
What are you doing here? You haven't said anything clever about pricing yet, where's the logic?
I'm waiting here for the bus.
Don't worry about us.
and the fifth post above (on page 21) has not yet been replied to ?
Don't worry about us.
>> no answer to the fifth post above yet?
Is this the 5th one from the beginning of the thread, or is it a different one?
>> And I'm waiting here for the bus.
Oops, here we go.
Oh, you mean that, colleague. All right, then. The situation (it doesn't get any more specific than that):
Currency dealers from different banks are sitting in one GENERAL virtual platform (e.g. Ducas, Reuters, Bloomberg or whatever). They have ticking quotes. They have 10 minutes parity, no trades, nothing happens, the quote provider from OTHER PLATFORM on the neighboring terminal is also quiet. Bids and Asks are buying. A new bid enters, 1 pip higher than the highest 10 minutes ago. There is also someone selling.
Bids and Asks.
The question is: why did the one who set the bid higher do it and why did the one who sold accept it? What did the first know and what did the second not know? Or maybe the second knew everything, but considered the news irrelevant? Or maybe the first one (under-) ran out of money and he needs to buy some more currency? What can happen to him at 23-30 in the morning, when his whole bank is asleep, and the applications for currencies from clients are accepted until 15-00? Did somebody in the bank predetermine to the banker that "if the exchange rate reaches xxxx, we could sell yyyy of currency"?
Oh, you mean that, colleague. All right, then. The situation (it doesn't get any more specific than that):
Currency dealers from different banks are sitting in one GENERAL virtual platform (e.g. Ducas, Reuters or whatever). They have ticking quotes. Parity is 10 minutes, no trades, calm, on the supplier of quotes from OTHER PLATFORM on the next terminal also silence. Bids and Asks are buying. A new bid enters, 1 pip higher than the highest 10 minutes ago. There's also someone selling.
The question is: why did the bidder bid higher, and why did the bidder accept the offer? What did the first know and what did the second not know? Or maybe the second knew everything, but considered the news irrelevant? Or maybe the first one (under-) ran out of money and he needs to buy some more currency? What can happen to him at 23-30 in the morning, when his whole bank is asleep, and the applications for currencies from clients are accepted until 15-00? Did somebody in the bank predetermine to the banker that "if the rate goes up to xxxx we could sell yuu currency" ?
Excuse me. Did I get that right? Am I supposed to answer your question instead of hearing the answer to mine ?
Instead of hearing you answer the question of what is the PRACTICAL PRACTICAL use of your information in the market, I still have to solve a couple of riddles of yours?
Bids and offers
What's the threat to us ordinary Earth dwellers?
Oh, you mean that, colleague. All right, then. The situation (it doesn't get any more specific than that):
Currency dealers from different banks are sitting in the same GENERAL virtual platform (e.g. Ducas, Reuters, Bloomberg or whatever). They have ticking quotes. They have 10 minutes parity, no trades, nothing happens, the quote provider from OTHER PLATFORM on the neighboring terminal is also quiet. Bids and Asks are buying. A new bid enters, 1 pip higher than the highest 10 minutes ago. There is also someone selling.
Bids and Asks.
The question is: why did the one who set the bid higher do it and why did the one who sold accept it? What did the first know and what did the second not know? Or maybe the second knew everything, but considered the news irrelevant? Or maybe the first one (under-) ran out of money and he needs to buy some more currency? What can happen to him at 23-30 in the morning, when his whole bank is asleep, and the applications for currencies from clients are accepted until 15-00? Did somebody in the bank predetermine to the banker that "if the rate goes up to xxxx we could sell yuu currency" ?
Do you also go to the potato market and ask why a person bought potatoes? Did he want to eat them or buy seeds or something else? What's that got to do with it?! A need arose, he bought/sold. There could be many reasons (i.e. tired of waiting).
At the potato market, do you also go and ask why a man bought potatoes? Did he want food or seeds or some shit? What's that got to do with it? He bought/sold. There could be a lot of reasons (i.e. tired of waiting).
It's obvious that "there could be a lot". Where is the list of reasons, ranked by importance and by volume?
The Foreign Exchange Interbank Market
by Kathy Lien,http://www.investopedia.com/articles/forex/06/interbank.asp?partner=answers
"How do banks determine the price?
Bank dealers will determine their prices based upon a variety of factors including, the current market rate, how much volume is available at the current price level, their views on where the currency pair is headed and their inventory positions. If they think that the euro is headed higher, they may be willing to offer a more competitive rate for clients who wish to sell euros because they believe that once they are given the euros, they can hold onto them for a few pips and offset at a better price. On the flip side, if they think that the euro is headed lower and the client is giving them euros, they may offer a lower price because they are not sure if they can sell the euro back to the market at the same level at which it was given to them. This is something that is unique to market makers that do not offer a fixed spread.
How does a bank offset risk?
Similar to the way we see prices on an electronic forex broker's platform, there are two primary platforms that interbank traders use: one is offered by Reuters Dealing and the other is offered by the Electronic Brokerage Service (EBS) .The interbank market is a credit-approved system in which banks trade based solely on the credit relationships they have established with one another. All of the banks can see the best market rates currently available; however, each bank must have a specific credit relationship with another bank in order to trade at the rates being offered. The bigger the banks, the more credit relationships they can have and the better pricing they will be able to access. The same is true for clients such as retail forex brokers. The larger the retail forex broker in terms of capital available, the more favorable pricing it can get from the interbank market. If a client or even a bank is small, it is restricted to dealing with only a select number of larger banks and tends to get less favourable pricing."