EFX Group

I guess I will explain it again. I believe that it is unethical for a broker to have negative interest rates that are twice as high as the positive ones. That indicates that they are not really the interest rates that would be theoretically "passed through" from the interbank market if MBT/EFX is an ECN. The broker would have to be acting as a middle man and not a true ECN in order to have interest rates other than the true difference between those of the two currencies that are being held. And mathematically the negative side would have to be the same as the positive side.

The fact that the negative side is twice as high as the positive side would seem to indicate that EFX/MBT is doing something other than acting as an ECN.
 
MountainTrader.........

I think the divergence is in understanding that MBT is an FCM utilizing ECN technology. Let me help clarify. The actual ECN that MBT uses is called 3D Forex.

Regards,

Steve
 
Its not unethical, since everyone can look up their commissions and swap rates.

I like their platform, i just don't see any point in trading there with the current commission-structure. Others do the same as them for less than half of what they charge.
 
Quote from mmccormac:

I've noticed even some of the bigger ECN brokers doing this as well. I trade with several brokers and not 2 of them are the same but all are better than what EFX is doing with their Swap rates. There are some larger banks that pay the true IRD but not many. Who do you recommend to your students?
More...

Unfortunately I am not abe to recommend any particular broker because I have not found one that has all the features that I desire. Plus almost all training programs are tied with an introducing broker which is why there is a vested interest in the type of trading that is taught in the Forex industry. I am glad to not be a part of that because I believe that brokers drive the industry and consequently, the way people trade. And the methods being promoted in the industry may not be in the best interest of the trader because it all originates with bokers whether directly or indirectly through IB training companies.

I do not wish to bash brokes in general because they are our business partners but as partners I would like to see my interests represented better.
 
My point entirely.

They allow customers to have an exposure and then have swap lines with a bank(s) to ensure they do not have large credit or debit balances in their nostro accounts overnight.

They then charge a large differential to their clients for this.

And if they have this ability then they also have the ability to debit a customer in his dollar account and credit their sterling, hedging any exposure with the rest of their book. But instead they charge 5 cents for the transaction and say it isnt them but their bank.....

Go figure.......
 
Quote from Pippi436:

Its not unethical, since everyone can look up their commissions and swap rates.

I like their platform, i just don't see any point in trading there with the current commission-structure. Others do the same as them for less than half of what they charge.
More...

Just because a broker discloses that their interest rates are a rip off does not make it any more ethical.
 
Quote from MBT-Steve:

MountainTrader..............

I have read your last post, I was not aware until now that a question was asked of me. I completely support an open forum and only intercede when something is erroneously stated or needs clarification. I will respond for EFX and MBT since the rates are identical. MBT has been on the forefront of changing the traditional way that FCM's operate in the FOREX market space (deal desk). That is, MBT keeps everything out in the open. We offer you the ability to trade directly with banks and financial institutions with no intervention. Our goal has always been to create a system and environment that offers the tightest spreads and legitimizes forex trading for a retail customer. We do this by allowing you to post your bids/offers down to 1/10 pip. Further, knowing that if you take liquidity from a bank that there is no markup/markdown. However, our prices are our prices and they are based on a nominal markup over our cost. We publish everything out in the open so that every customer knows exactly what any charge is. With regard to being unethical. These words certainly get my attention. I am having difficulty following your logic as to how we are acting in an inappropriate manner? Our rollover rates are fully published. I can certainly appreciate your desire for lower fees and they will change throughout time however this is currently what they are within our model.

Lastly, allow me to state and maintain publicly that for almost a decade MB Trading has maintained its reputation as an ethical, moralistic company. We operate to serve our clients and I believe we do that quite well. Should you wish to speak with me further or even privately, please PM me.

Regards,

Steve
More...

Interest rates are not fees. They are (theoretically) the difference between the interest rates of the two currencies in the pair. Therefore it is unethical for them to be anything other than that.
 
Quote from MBT-Steve:

Lon............

Please clarify further.
More...

What would you like clarifying?

Are you saying a 5 cent spread is reasonable?

Are you saying you have no mismatch on your book at the end of every day?

Are you saying you have no tom/next, spot/next and forwrd lines with banks and thus could easily debit an account in dollars and credit it in sterling?

Are you saying you are a true ECN and so match all sells and purchases. If this is the case how do you deal with the situation when client A is short of dollars at the end of the day and it was covered with bank x and client B is long of dollars but it was covered with Bank z? You therefore have no internal exposure between clients but have one with both bank x and bank z?
 
Lon..........

I can see that you have a different interpretation of what an ECN means. Please look at it just like the way ARCA is an ECN. An Electronic Communication Network which allows for banks, institutions, and retail customers to all trade together within one network. It clearly does not mean just retail customer to retail customer. In ARCA's case for example you could have scenarios where retail, institutions, and exchanges all trade with one another. The same applies for when I am describing how MBT uses ECN technology for spot forex trading.

With regards again to the conversion of currency I think the confusion rests within not drawing the distinction between trading the spot market (ecn routing) and a banking functionality (converting currencies). Again, MBT is not a bank so the conversion was done at the bank which I understand you did not agree with the conversion rate. This is why I suggested that you can always take the currency in US dollars and convert within your bank.

Regards,

Steve
 
You must log in or register to reply here.
Back
Top