Anybody trading currencies?

[TradingWise]

Quote from FredBloggs:


with futures, you can negotiate your commission structure depending on how much business you put through. try asking o&a for that! (or ib for that matter)

so the answer is flexibility. the retailfx weasel owns you and owns your strategy. he decides what $ you get in on and out at. in other words, hes the daddy, and youre his bitch. with futures you can be a street fighter and slap some ass around.

now you dont wanna be the bitch anymore do you!

I don't know what size you trade, but you are probably the one that DOES NOT benefit from the 'bigger size, lower commissions' thing. Everybody equal, very low, commissions/spread is fairer in my opinion.

And again, brokers who hedge their aggregate positions only profit from the spread, they don't own me, nor am I their 'bitch'. LOL.

 

[TradingWise]

Quote from Rickshaw Man:

Thsie is no since in arguing with him his mind is made up.

Yes, I noticed, he just ignores what I write. I guess the topicstarter has a good idea now about the differences between spot and futures.

 

[FredBloggs]

i thought 1.5 was for each side! yikes, maybe im the bitch then

the spread will exist in all markets and is there to facilitate trade. if there was no spread i could not buy at 5 and then immediately sell at 6 (so i profit if i do this, not the exchange - although they do collect a fee from yours truly for doing this). this provides liquidity to the exchange/market as you and i can make immediate profit if we r quick.

there is also a spread in the REAL spot fx market. so when you buy at 6, o&a actually buys at 5 and then sells to u at 6 (eg) he wins every time. if you want to get out u can only do so at 4 (eg) cos you now sell to o&a at 4, so he buys from you at 4 then sells in spot market for 5 (eg). you lose both times, he wins both times.

id rather play on a level playing field and not be the bitch.

 

[FredBloggs]

Quote from TradingWise:

I don't know what size you trade, but you are probably the one that DOES NOT benefit from the 'bigger size, lower commissions' thing. Everybody equal, very low, commissions/spread is fairer in my opinion.

And again, brokers who hedge their aggregate positions only profit from the spread, they don't own me, nor am I their 'bitch'. LOL.

r u a communist?

why should i pay the same as some 1 lot superstar that is so typical of et? think of it as buying in bulk.

if you believe in equality and fairness, why are you trading at o&a and not at a regulated exchange??


im confused

 

[TradingWise]

Quote from FredBloggs:

i thought 1.5 was for each side! yikes, maybe im the bitch then

the spread will exist in all markets and is there to facilitate trade. if there was no spread i could not buy at 5 and then immediately sell at 6 (so i profit if i do this, not the exchange - although they do collect a fee from yours truly for doing this). this provides liquidity to the exchange/market as you and i can make immediate profit if we r quick.

there is also a spread in the REAL spot fx market. so when you buy at 6, o&a actually buys at 5 and then sells to u at 6 (eg) he wins every time. if you want to get out u can only do so at 4 (eg) cos you now sell to o&a at 4, so he buys from you at 4 then sells in spot market for 5 (eg). you lose both times, he wins both times.

id rather play on a level playing field and not be the bitch.

lol, so you pay about $ 30 per round turn in futures?

I still don't understand the spread part, but can you back up you accusations about Oanda with some kind of proof? How do you know they apply the policy you described above?

 

[FredBloggs]

Quote from TradingWise:

lol, so you pay about $ 30 per round turn in futures?

I still don't understand the spread part, but can you back up you accusations about Oanda with some kind of proof? How do you know they apply the policy you described above?

no i dont pay $30rt. if you read the above posts u may get a better idea.

as for o&a numbers - well i dont trade there and these numbers are hypothetical which is why i put '(eg)' around the numbers.

the secret is with trading is to keep an open mind. i dont think it is wise to get to clever when you dont understand what a spread is.

sorry, but i have more constructive things to do now.

all the best.

 

[AC3]

Do me a favor and explain what you mean by this:

And again, brokers who hedge their aggregate positions only profit from the spread

 

[TradingWise]

Quote from FredBloggs:

r u a communist?

why should i pay the same as some 1 lot superstar that is so typical of et? think of it as buying in bulk.

if you believe in equality and fairness, why are you trading at o&a and not at a regulated exchange??


im confused

Yes, I'm from Europe, of course I'm a communist.

Discounts for high volume creates price differentiation, which does not benefit the transparency of the exchange/market. Next to that, there is no benefit of more high volume players for a retail market maker other then extra revenue because they hedge aggregate positions. The local spot market does not become more liquid because more volume is attracted, which is the case in futures if I am correct.

 

[AC3]

Quote from TradingWise:

Yes, I'm from Europe, of course I'm a communist.

Discounts for high volume creates price differentiation, which does not benefit the transparency of the exchange/market. Next to that, there is no benefit of more high volume players for a retail market maker other then extra revenue because they hedge aggregate positions. The local spot market does not become more liquid because more volume is attracted, which is the case in futures if I am correct.

I mean no malice by this but you have no idea what your talking about regarding the inner workings of a cash fx brokerage. Aggregate positions.....no such animal... are you implying that a broker takes on positions and hold them and at some future points adds them to other positions and then magically hedges that position........ that would be a recipe for a mushroom cloud

 

[TradingWise]

Quote from AC3:

Do me a favor and explain what you mean by this:

And again, brokers who hedge their aggregate positions only profit from the spread

Clients open short trades for EUR/USD totaling 10 billion.

Clients open long trades for EUR/USD totaling 11 billion.

Broker matches 10 bil short against 10 bil long. Market maker has no risk over this volume (10 + 10 bil) as it is matched.

1 bil long remains. They hedge this with a 3rd party (by shorting 1 bil).

Summary:

Revenue:

10 bil long x 1.5 pip spread.
10 bil short x 1.5 pip spread.
1 bil long x 1.5 pip spread.

Cost:

1 bil short x 1.0 pip spread [I don't know what the cost is for hedging with the 3rd party, but even higher costs than the collected spread would make them money in total].

Result:

They collect the spread over the matched volume and collect/pay a small amount depending on the cost for hedging with the 3rd party.

edit: maybe 'aggregate' is not the correct word. I just copied that from someone else as my English is not perfect.