NFA bans locking from 15 May 2009 - page 6
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Timbo
А меня сегодня весь день мучает этот вопрос. Не то тут что то, постараюсь пояснить.
Ведь запрет если я правильно понял сделан для ДЦ. Что получается, это же технический вопрос. Давай допустим, что мы с тобой работаем через один ДЦ, и довольно крупными лотами.
Вопрос. Что делать ДЦ ? Как он меня перекроет ? если ему эта операция запрещена ?
З.Ы. многие рассматривают это заявление со стороны трейдера. Да это правильно и все логично, но вот если смотреть со стороны ДЦ, то что получается. ДЦ меня будет реквотить пока не сможет усредниться и (или) перекрыть, так что ли получается ? ((
Overlap the second position at the second counterparty of the DC ;)
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However... what does "large lot" mean for the DC?
Firstly, it is a part, if not completely dissolved in the total position,
secondly, it does not make sense to send immediately to the counterparty, because this position may be unprofitable,
(so we block the joint lot, and even if there is one, it is at the loss of brokerage companies, and exceeds the DM of brokerage companies...) For the first time, it is a part of the joint lot. )
Thirdly, who will be sure that there won't be a similar situation when this large lot
- a) is blocked by one client
- b) two different traders will make different decisions, one will block, the other will block.
What is the difference for brokerage companies if the probability of both cases is the same? ;)
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One more thing...
With all possible variations of BCs' overlapping of a common position by one symbol at a time.
only a "quarter" which exceeds the MM of the DC, because this position can be one of the following:
- buy in -
- buy in +
- sell in -
- sell in +
Minus ones (i.e. clients in the majority incur losses so there is no need to pay them)
What concerns positive ones, i.e. profitable for clients, it
When and how much and what to use as a cover ...
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And this is only a small fraction of the "other side of the screen" processes.
Гы-гы. Продолжайте верить.
Some in the public domain strategies don't help. Continue to disbelieve.
But honest brokers, on the contrary, get their hands slapped if they start to overlap, brew inside themselves. Because all sorts of bad things happen from that. But the broker lives off the commission.
Funny of course, the national futures organisation regulates forex. What about futures, brokers, comodities?
There is nothing to master here. Diversification is a scientifically proven fact. Locking, just like martingale, leads to ruin. By randomness of events, some early, some late, but the result is the same.
And no one is arguing with that...
BUT!
If diversifying by opening a counter position on another symbol
=
locking on one
So, yes, the result is the same...
;)))))))))))))))))))))
Or do you think the pasting on the other symbol is not subject to "the power of random events"?
Overlap the second position at the second counterparty of the DC ;)
*
However... what does "large lot" mean for the DC?
Firstly, it is a part, if not completely dissolved in the total position,
secondly, it does not make sense to send immediately to the counterparty, because this position may be unprofitable,
(so we block the joint total, and even if there is one, it is at the loss of brokerage companies, and exceeds the DM of brokerage companies...) )
...I already wrote about two accounts.
But I ask you to think about water. Combat let's say you are a dealing centre. Timbo entered 50 lots. You averaged and the difference overlapped on the interbank, let's say 30 lots. And now the jerk Prival came out through you also 50 lots, 5 minutes after this event, you have averaged, and it turned out that you have to make a lock to close me on the interbank. And you're not allowed to do that ((. What are you going to do with my order as a DC? Pay the profit out of your own pocket ? After all, both Timbo and I can make a profit (the level of taking the TP is unknown to you).
And no one is arguing with that...
BUT!
If diversifying by opening a counter position on another symbol
=
locking on one
Then, yes, the result is the same...
;)))))))))))))))))))))
Or do you think an entry on another symbol is not influenced by the "random events"?
Actually, diversification is simply opening positions (no matter which ones) in different instruments. Opening a counter (targeted) position on another instrument is hedging. And a lock is just a position on the same instrument. There are several interesting theorems about diversification, some of which substantiate the existence of hedging. But a lock is a non-market instrument, its sum =0.
I have already written about the two accounts.
But I ask you to think about the waters. Combat let's say YOU are a dealing centre. Timbo entered with 50 lots. You averaged and the difference overlapped on the interbank, let's say 30 lots. And now the jerk Prival came out through you also 50 lots, 5 minutes after this event, you have averaged, and it turned out that you have to make a lock to close me on the interbank. And you're not allowed to do that ((. What are you going to do with my order as a DC? Pay the profit out of your own pocket ? After all, both Timbo and I can make a profit (the level of taking the TP is unknown to you).
Who has two accounts? Traders or a brokerage company?
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As far as I know the brokerage company can have more than 1 liquidity provider.
So the problem where to close the lock is not solved...
*
If the brokerage company is young and naive and has only one provider, it is its problem.
In any case, whether it's a "crumbled-in-the-wool" DC or a "bigwig in the law", the first thing the client's positions
will be mixed up with the general mush, and then another mechanism of liquidity provision will follow...
*
I don't see anything complicated or supernatural about it.
In general, diversification - is simply opening positions (no matter what) in different instruments. The opening of a counter (targeted) position on another instrument is hedging. And a lock is just a position on the same instrument. There are several interesting theorems about diversification, some of which substantiate the existence of hedging. But a lock is a non-market instrument, its sum =0.
Huh! a diver is a non-targeted opening and a hedge is the opposite.
Good logic... nothing to say...
:)))))))))))))))))
*
Theorems are good... but at the very least they need practical proof,
but existing practice is already a rather successfully exploited reality...
*
How is lock a non-market instrument???
And who claims that loc = 0 ?
Spit in his eyes and throw a stone at him...
;)))
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Lot trading, on which MT (and not only) is based, equates a position with a trade.
Then what prevents me from buying a bag of potatoes #1 at 50p in the bazaar and periodically selling
part of another sack of #2 fries up to the full amount of #1 when the price goes down?
While remaining in a temporary/price position on the chart with a sack of #1 that I will finally sell
(i.e. close a position) at the right time and price...
*
Yes! With the introduction of netting, we'll also have to deal with the account history... brrrr... I can't even think about it...
The clients of DCs with rollover may share their joy with us now.
;))))))))))))))))))))))))))))) ask them, don't be shy...
Two accounts with who? Traders or a brokerage house?
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As far as I know a brokerage company can have more than 1 liquidity provider.
So the problem where to close the lock is solved...
*
If the brokerage company is young and naive and has only one provider, it is its problem.
In any case, whether it's a "crumbled-in-the-wool" DC or a "bigwig in the law", the first thing the client's positions
will be mixed up with the general mush, and then another mechanism of liquidity provision will follow...
*
I do not see anything complicated or supernatural in it.
1. The brokerage company has several accounts, but if you think deeper, it seems to me that this does not solve the problem. Margin Call, there is for all. (you have to transfer funds from one account to another in a hurry).
2. does not eliminate the problem, just put yourself in the place of a broker.
3. you are talking about a different mechanism. What is it? How will you handle this situation ?
4. I'm sorry, but I see the difficulty, or should I say, confusion for myself.
I will wait for Timbo, although he is not the truth in the first instance, he often has a contrary opinion, in my view biased, but not one to pass by.
It would be interesting to hear the opinions of DC owners, pity they have a closed forum from us.