P
Peblo
Are all orders in spot FX sent directly to IB's liquidity providers? Who are they?
Is IB at any point a counterparty to its clients trades?
Is IB at any point a counterparty to its clients trades?
investment banks ?
Sure, depends on client quality. If you're a bad trader then why should i forward you to others if i can be your CP
P
Peblo
Why should it depend on "client quality", whatever that means? BTW, I wonder how the issue reported in the thread below ended:
https://www.elitetrader.com/et/threads/interactive-brokers-insisting-on-spiked-fx-price.322308/
https://www.elitetrader.com/et/threads/interactive-brokers-insisting-on-spiked-fx-price.322308/
The better you are at trading the less there is interest to CP your trade. So, it gets passed on like a hot potato. Everyone wins in their first year. Things suddenly change during 2nd and 3rd year, haven't you noticed ?
def
Sponsor
IB has numerous liquidity providers who are mostly major banks and institutions making the markets. Client's bids/offers also become part of the liquidity. Orders are routed via a back to back transaction so the counter party is essentially IB on both sides of the trade but has no economic interest other than the commission (.2 pips or less) ie. the price you receive is the exact price traded with the liquidity provider.
P
Peblo
OK. So even the smallest of orders is sent as part of a larger block to the liquidity providers? Is there any internal order matching within IB?
Does IB do any proprietary trading on its own account?
In other words, are you really allowing your small clients (non-U.S.) trade almost directly with the big liquidity providers and are you not screwing your clients like most retail FX brokers do?
Does IB do any proprietary trading on its own account?
In other words, are you really allowing your small clients (non-U.S.) trade almost directly with the big liquidity providers and are you not screwing your clients like most retail FX brokers do?
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P
Peblo
English is not my native language - perhaps I should have used a different word. I meant "not being fair with your clients"
and how is that ? You are getting near zero spreads and commissions don't you ? If you're going to your local currency exchange the spread is 100s of pips.
What exactly is not fair ?