FX trading model at IB

  • Thread starter Thread starter Peblo
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Peblo said:
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?
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Peblo, if you know anything about the IBKR model you wouldn't be stating your question as you have.
Here is the basic overview of our offering
https://www.interactivebrokers.com.hk/en/index.php?f=759

No hidden price spreading, no markup, no kickbacks. Just the combination of real time prices from 17 of the world's largest FX dealing banks plus a transparent, low commission that avoids the conflict of interest of FX platforms which deal for their own account.

For sizes less than 25K USD which are too small for the institutions, you may get a fill 1 or 2 pips wider as those making those markets take on the risk of building size greater than 25K before they can lay off a hedge. As mentioned, that spread/fill will still be most likely significantly better (can be more than 50-100+ pips better) then going to bank. However, there is nothing stopping the small size client wanted to do a conversion to place a bid or offer to work an order.

Now of course, proof is in the pudding. Give it a try and I'm fairly certain you'll be pleasantly surprised.
 
tsfx said:
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 ?
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is IB a true ECN broker?
 
def said:
Peblo, if you know anything about the IBKR model you wouldn't be stating your question as you have.
Here is the basic overview of our offering
https://www.interactivebrokers.com.hk/en/index.php?f=759

No hidden price spreading, no markup, no kickbacks. Just the combination of real time prices from 17 of the world's largest FX dealing banks plus a transparent, low commission that avoids the conflict of interest of FX platforms which deal for their own account.

For sizes less than 25K USD which are too small for the institutions, you may get a fill 1 or 2 pips wider as those making those markets take on the risk of building size greater than 25K before they can lay off a hedge. As mentioned, that spread/fill will still be most likely significantly better (can be more than 50-100+ pips better) then going to bank. However, there is nothing stopping the small size client wanted to do a conversion to place a bid or offer to work an order.

Now of course, proof is in the pudding. Give it a try and I'm fairly certain you'll be pleasantly surprised.
More...

I understand. Thank you for explaining. It is not directly related question but could you confirm that no company within IB group deals for its own account? Do you do any market making and in what instruments?
 
Peblo said:
I understand. Thank you for explaining. It is not directly related question but could you confirm that no company within IB group deals for its own account? Do you do any market making and in what instruments?
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You should just look at our financials or listen to an earnings report. We have a derivative market making side formally called Timber Hill. It was wound down in the states but active in a few markets in Asia. Timber Hill does not trade against nor see any IB client flow. Never has. They are not trading FX but that certainly wouldn't matter here if if they were as if TH (or any other IB entity for that matter) would make markets or trade FX, they merely would become part of the liquidity pool. Orders would route to the best available quote which are transparently shown on the screens.

The quotes you see (you can look at the link I provided above for real time snapshots as well) speak for themselves. I think time to move on as this topic has been beaten to death. I have provide no additional information that can't be found on our site, earnings or regulatory reports.
 
def said:
You should just look at our financials or listen to an earnings report. We have a derivative market making side formally called Timber Hill. It was wound down in the states but active in a few markets in Asia. Timber Hill does not trade against nor see any IB client flow. Never has. They are not trading FX but that certainly wouldn't matter here if if they were as if TH (or any other IB entity for that matter) would make markets or trade FX, they merely would become part of the liquidity pool. Orders would route to the best available quote which are transparently shown on the screens.

The quotes you see (you can look at the link I provided above for real time snapshots as well) speak for themselves. I think time to move on as this topic has been beaten to death. I have provide no additional information that can't be found on our site, earnings or regulatory reports.
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are you true ECN ?
 
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