Good info, thanks.
This is a futures broker, not stocks.
This is a futures broker, not stocks.
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Consent to Take the Other Side of Orders?
- Thread starter Razorsharp
- Start date
it's their way of cutting the queue at any price. ie. there is an offer for 200,000 which they are 10,000 contracts on citi at 4$ or whatever, if you buy, they get to cut the line and take your liquidity where in any fair market they wouldn't have gotten that liquidity- +rebates for them, same price for you. i had to sign the same deal when i had a broker at UBS. no harm no foul just a few extra pennies for them for being your brokerage.
I believe futures are more strictly regulated (by the exchanges that want to keep their commission, not the government).Quote from Razorsharp:
This is a futures broker, not stocks.
So, you cannot sell a future to your friend (or a person your broker chose with high amount of subjectivity) and register such a sale with the exchange. You have to perform a trade via the respective exchange for it to be a valid future.
Given the above, the clause probably means that the broker is an "introducing broker". So, the actual execution wil be performed by another company.
It is fine... except the OP has to do triple due diligence. Besides checking the broker in question, the OP needs to check: the broker that executes the orders for clarity, the clearing house for timeliness, and the party that holds clients' funds for the solvency.
The idea is stocks can be traded outside exchange. (There are certain conditions regarding giving a fair price to "retail" customers but a duped customer needs real determination to persue a "fairness" claim if they are taken advantage of.)Quote from Razorsharp:
Can you explain a bit more about the cross order?
In fact, most of large transactions.... where the seller sels 25% of the company or so to the buyer happen outside any exchange.
So, there is nothinbg inheritly wrong regarding selling stocks outside of an echange (while future have to be sold via an exchange to be valid).
Brokers with large volume in stocks find out that they can offer their customers a better price thatn a respective exchange by matching a customer who wants to sell to a customer that wants to buy. Both customers get a better price... except they both loose any premium the exchange would pay for adding liquidity.
Adding liquidity means putting a limit sell order above the currend bid price or putting a limit buy order below the current offer price.
That broker says they clear the trades themselves.
Quote from LeeD:
I believe futures are more strictly regulated (by the exchanges that want to keep their commission, not the government).
So, you cannot sell a future to your friend (or a person your broker chose with high amount of subjectivity) and register such a sale with the exchange. You have to perform a trade via the respective exchange for it to be a valid future.
Given the above, the clause probably means that the broker is an "introducing broker". So, the actual execution wil be performed by another company.
It is fine... except the OP has to do triple due diligence. Besides checking the broker in question, the OP needs to check: the broker that executes the orders for clarity, the clearing house for timeliness, and the party that holds clients' funds for the solvency.
advantage futs have this