"IB LLC" more busy than Timberhill w/ "counterparty" market making?
- Thread starter Option Trader
- Start date
Forex doesn't usually have the percentage moves of a stock ... so you need to take that into account when assessing risk.
I must be missing something, with all you brilliant traders obsessing over Timber trading against you.
Exactly what is it you are concerned about? Presumably you enter an order wanting to be filled at that price. You get filled. Now you care who filled you?
Yes, if you wanted to lift an offer and instead got a Timber fill, that may be an issue. Other than that , seems a non event.
Exactly what is it you are concerned about? Presumably you enter an order wanting to be filled at that price. You get filled. Now you care who filled you?
Yes, if you wanted to lift an offer and instead got a Timber fill, that may be an issue. Other than that , seems a non event.
Because in the unregulated forex world , individualized pricing, trading against clients is a much used tactic, I don't say IB is doing this
IB will only raise the 5 million limit IF AND ONLY IF they (market makers being the banks and/or IB) at the other side can make money of your order flow, that's the REAL reason for this limit.
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That's a totally false statement. If you actually were a client you would be able to see the 1 -2 pip wide markets being made by multiple banks competing against each other. You never know who is going to be on the other side of the order and unlike many other brokers, you're even be able to place orders that split the spread.
You didn't answer why you have that "protection" in place ONLY for forex
If my account is with IB and IB/TH is on the other side of my trade then they have an informed positon aka an edge. They have have financial ability to move markets against my position. If they know where money is, then they know where to make money. If 10,000 shrs. of a stock is bought and you have no information as to who's on the other side (a large or small player) then IB/TH will be much more careful about moving the market looking for a stop. If they know that the 10,000 shrs. was bought by me (an IB client) and this represents 40% of my total portfolio then they have an informed analysis, and can move the market against me understanding the heat they are putting on my account. If they have my trade history and realize my trading patterns & stop-loss levels then they know the odds of success for moving the market.
If I come up with a long/short strategy to hedge correlated pairs and it makes money consistently on a daily basis, then IB can review where they're losing money to clients ; they can see this and counter this hedge directly to break the correlation.
Say IB doesn't take the actual trade, they still know the info and can raise the bid offer .50 short 10,000 shrs., buy calls against this, Continue to drive the market down collecting the spread and hedging with calls. They get the market down 15% I give up and sell. IB/TH then knows where to cover and take the market up. Without customer order flow info they don't know where to begin or stop their moves (aka no edge)
Thanks for your detailed response.
I imagine that in theory , this is a possible scenario.
Of course, all trading seeks to take advantage of something.
I see stocks moving wildly and wierdly all day, every day. Do you imagine these are all trades against 10,000 share blocks bought on spec by scalpers?
If you are buying 10k at once in a thin name, then you know there are 100 things that can go against you. Or for you.
To imagine your broker is targeting your trade for a shakeout, is not productive.
Should such a thing ever come to light , there would be hell to pay for any broker. Not worth it. Not for a few grand piker money, unless you think this goes on 1000 times a day. I know you don't.
If you fear such things, trade the biggies or the ES. There's no manipulation there.
Ahem.
I imagine that in theory , this is a possible scenario.
Of course, all trading seeks to take advantage of something.
I see stocks moving wildly and wierdly all day, every day. Do you imagine these are all trades against 10,000 share blocks bought on spec by scalpers?
If you are buying 10k at once in a thin name, then you know there are 100 things that can go against you. Or for you.
To imagine your broker is targeting your trade for a shakeout, is not productive.
Should such a thing ever come to light , there would be hell to pay for any broker. Not worth it. Not for a few grand piker money, unless you think this goes on 1000 times a day. I know you don't.
If you fear such things, trade the biggies or the ES. There's no manipulation there.
Ahem.