Explain the mechanism. If I opened on one market maker, how can I now close on another market maker? - page 2
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These are all fairy tales to the people.
It is TECHNICALLY possible to hedge risk only for one large position.
If the brokerage company accumulates many small positions and places an aggregate position with a liquidity provider, then as the small positions close, the brokerage company is forced to keep its position with the provider, ACCEPTING ALL RISKS. That is, if there are 1000 clients and one of them closes his position, the BC cannot close the aggregate position - it compensates this client from its own funds and takes over the possible loss from his position in the aggregate rate at further price dynamics. This is not possible.
Amazing inconsistency and misunderstanding...
These are all fairy tales to the people.
It is TECHNICALLY possible to hedge risk only for one large position.
If the brokerage company accumulates many small positions and places an aggregate position with a liquidity provider, then as the small positions close, the brokerage company is forced to keep its position with the provider, ACCEPTING ALL RISKS. That is, if there are 1000 clients and one of them closes his position, the BC cannot close the aggregate position - it compensates this client from its own funds and takes over the possible loss of his position in the aggregate rate in case of further price dynamics. It is not possible.
Bullshit.
You don't understand exactly how the order placement mechanism works, the broker/clearing house does open an aggregate position of clients on one instrument and closes it the same way, i.e. partially!!!!.
To open an aggregate long or short position (my assumption), the broker/dealer works either through different exchange access providers or through separate accounts of the same exchange.
Bullshit.
You don't understand exactly how the order placement mechanism works, the broker/dealer actually opens an aggregate customer position in one instrument and closes it the same way, i.e. partially!!!!
In order to open an aggregate long or short position (my assumption), the broker/dealer works either through different exchange access providers or through separate accounts of the same exchange.
How do you envisage this?
First of all, Forex is not an exchange.
Suppose 10,000 clients open a EUR/USD buy position at USD 100 each AT ONCE - the BC places a USD 10,000,000 position in the bank.
Then one of them closes his position - how can a brokerage company CLOSE its position of $100 at the bank at any time?
What if clients do not open at the same time? What if they opened in buy for $5,000 and opened in sell for $5,000 - what is the minimum lot in forex?
How do you envisage it?
Firstly, forex is not a stock exchange.
Suppose 10,000 clients open a EUR/USD buy position of $100 each at one time - the BC places a $10,000,000 position in the bank.
Then one of them closes his position - how can a brokerage company CLOSE its position of $100 at the bank at any time?
What if clients do not open at the same time? And if they opened in buy for 5000 dollars and opened in sell for 5000 - what is the minimum lot in Forex?
Are you a fifth-grader? Go read Wikipedia. ))
What are you, a fifth grader? Go reread Wikipedia... ))
Are you mad that I was so mean to you last time?
Are you offended that I brutalised you last time?
Oh, you're the wikipedialist who can't read and think. Ha, that's a good guess on the wiki)))
Nah, I'm not offended, I just saw your stubborn stupidity once again, and I can't get past it when you sow stupidity and nonsense again. But nothing seems to help you anymore, finish school first )
Rebs, a position can be hedged with a futures. You buy a long futures with a horizon of 6 months and sell the same futures at the same time. And then you sell those two big positions at the bazaar. Who wants to buy, be my guest. Who wants to sell, no problem. The main thing is to sell these two positions by the time the market opens. That's how you become a market maker. For a moment. And most likely more or less large brokerage companies do this. They buy futures on the exchange and sell them to their clients without withdrawing them. IMHO
Another one...
A futures is a unified type of exchange-traded contract.
A currency futures has what minimum dollar volume? How much currency?
Here are the brokers saying that they now have a stack of market makers who place their bids at different levels in this stack.
And at any given time the broker chooses the best bid and the best ask for their clients.
Market makers also provide leverage to brokers, usually 100.
Imagine the situation: I opened a trade on one market maker. A buy trade at ask price, with a leverage of 100.
We essentially made a bet with this market maker on the price change of the currency pair. We stand in the trade with him. When the currency pair rises, I am in profit, when it falls, he is in profit.
Now the time has come when I want to close the trade. OK I would close on this market maker, it would be easy there.
But the broker says that at the time of closing he also picks me the best market maker, with the best price.
Explain to me how the closing process works if I open at one market maker and want to close at a completely different one.
In general, the market maker has already done everything he had to do on the first leverage trade - provided liquidity and as quickly resold his result to the next one.
But the "betting" you have already made with a broker in a spread no smaller than the maker's.
That's why "closing with leverage on another market maker" is a strange phrase. He doesn't know you and the train has already left
Another one...
A futures is a unified type of exchange-traded contract.
A currency futures has what minimum dollar volume? How much currency?