Interesting read...
http://www.secinfo.com/d1Z7ar.vt.htm
You'll need to scroll down about a third of the way.
http://www.secinfo.com/d1Z7ar.vt.htm
You'll need to scroll down about a third of the way.
FX Marketspace conference call text.
- Thread starter ddunbar
- Start date
I think it's a pipe dream.
"Participants," as they say... will ultimately go wherever they want regardless of CME/Reuter's plans to be the only "centralized exchange for FX."
Wherever traders can get the best spreads, fastest execution times and most reliable services is where they'll open their FX accounts.
DD
"Participants," as they say... will ultimately go wherever they want regardless of CME/Reuter's plans to be the only "centralized exchange for FX."
Wherever traders can get the best spreads, fastest execution times and most reliable services is where they'll open their FX accounts.
DD
If you read down where the Q&A is, it appears that they have firm commitments with some large banks. That'll certainly get the ball rolling.
In any event, all the things you say, "best spreads, best execution, best clearing" will be had on the CME/Reuters platform. Why best/better spreads? Because a bank will in all probability make more from fees than off a spread. Think about it. Competition has alread brought spreads down to 1 to 1.5 pips. Banks aren't making as much as they used to in the three pip days. And since the FX markspace will be avaliable to retail clients (Int Bkrs is committed to being one of the first to offer it), buckteshops don't stand chance unless they too evolve towards straight through processing with a fee(commission). I see Spreads going down to .5 to 1 with commission being the norm.
Currently with FX futures, EURO FX specifically, you pay 1 pip plus avg $6 RT fee. That translates into 1.5 pips. Avg bucketshop is charging 3 pips on majors, more sometimes if not fixed. Oanda happens to be one of the few who avg 1.5p on Eur/USD. Banks could do better, but don't currently for a number of reasons. But they could get it down to 0 to .5. That is if they can be compensated by charging a fee. If transparency increases, cross currency risk decreases(due to centralized clearing), and volume increases, fee based trading would probably become the norm. And that's what FX Marketspace is all about.
It has a very high probability of succeeding.
In any event, all the things you say, "best spreads, best execution, best clearing" will be had on the CME/Reuters platform. Why best/better spreads? Because a bank will in all probability make more from fees than off a spread. Think about it. Competition has alread brought spreads down to 1 to 1.5 pips. Banks aren't making as much as they used to in the three pip days. And since the FX markspace will be avaliable to retail clients (Int Bkrs is committed to being one of the first to offer it), buckteshops don't stand chance unless they too evolve towards straight through processing with a fee(commission). I see Spreads going down to .5 to 1 with commission being the norm.
Currently with FX futures, EURO FX specifically, you pay 1 pip plus avg $6 RT fee. That translates into 1.5 pips. Avg bucketshop is charging 3 pips on majors, more sometimes if not fixed. Oanda happens to be one of the few who avg 1.5p on Eur/USD. Banks could do better, but don't currently for a number of reasons. But they could get it down to 0 to .5. That is if they can be compensated by charging a fee. If transparency increases, cross currency risk decreases(due to centralized clearing), and volume increases, fee based trading would probably become the norm. And that's what FX Marketspace is all about.
It has a very high probability of succeeding.
I'd trade 10-pt spreads for free anytime rather than paying anything in commission to trade even 1-pt spreads.
Plus, no single exchange will ever handle all the core forex exchanges made on a daily basis.
No way - no how.
In addition... where do they think they're gonna get their clients from?
Guys who are happy with their brokers stay with them and for good reasons.
At best, FXMP will attract only some new traders who enter the fx. Most lose. And every disadvantage (in direct comparison to other fx brokers) there is with FXMP will in turn disuade traders from using their servers.
At worst, it will keep the fx brokers on their toes to continue to advance and offer the best service possible.
All for the traders' benefit, thank the god of forex. ;-)
dRaWdOwN
Plus, no single exchange will ever handle all the core forex exchanges made on a daily basis.
No way - no how.
In addition... where do they think they're gonna get their clients from?
Guys who are happy with their brokers stay with them and for good reasons.
At best, FXMP will attract only some new traders who enter the fx. Most lose. And every disadvantage (in direct comparison to other fx brokers) there is with FXMP will in turn disuade traders from using their servers.
At worst, it will keep the fx brokers on their toes to continue to advance and offer the best service possible.
All for the traders' benefit, thank the god of forex. ;-)
dRaWdOwN
Skalpz
ddunbar,
What they are not telling you is that this is the way that the NFA can become the controlling arm of the regulation side.
The real trouble they will have is to get GLOBAL participation. This is why Forex is so fragmented and unregulated. Forex is a secondary market and there will always be a secondary market.
Now in 100 years in one Global economy where the UN taxes everybody...we can talk...We just need two more generations of youngins' to get polluted.
Michael B.
And that's what FX Marketspace is all about.
What they are not telling you is that this is the way that the NFA can become the controlling arm of the regulation side.
The real trouble they will have is to get GLOBAL participation. This is why Forex is so fragmented and unregulated. Forex is a secondary market and there will always be a secondary market.
Now in 100 years in one Global economy where the UN taxes everybody...we can talk...We just need two more generations of youngins' to get polluted.
Michael B.
And that's what FX Marketspace is all about.