Very nice update list IBj. Please do whatever you can to expedite the NZD rollout. Globex futures for the kiwi just aren't liquid enough.
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IB new forex spreads
- Thread starter oktiri
- Start date
how many liquidity providers do you currently have? and or you planning on raising leverage to 100:1? thanksQuote from IBj:
We will be releasing some new order routing algorithms in the next few days intended to better integrate the small order facility (IDEAL) and the main trading platform (IDEALPRO).The exact timing of the various features is imprecise but they will be integrated over the next 1+ weeks.
- Large Order Routing Protection: orders submitted for more than the minimum order size (currently ~25K USD) will be automatically routed to the bank market, even if they are accidentally entered into IDEAL. This is intended to provide better fills for clients who erringly enter larger orders into the less liquid small order book. There are limitations to this added protection (for example, KRW is not available in the interbank market) but it should eliminate most pricing problems and mistrades.
- Residuals: residual small orders will still be executable on the interbank market. Example: client A submits buy order for 40K USD.CHF. Client B submits sell order for 50K, executed against the resting 40K bid, but leaves a 10K residual. Previously, this residual would not be sent to the banks because it would be less than the 25K minimum. Under the new algorithm, the 10K will be executable on the interbank quotes, even if the price is changed. If the size is changed, however, it will be deemed to be a new order and will be subject to the minimum order size restriction.
- Merging IDEAL/IDEALPRO: you can enter small orders directly into the IDEALPRO quoteline. When you hit submit, you will get a warning message that the order is too small for the interbank market but it can be accepted anyway. If accepted, these small orders will actually get routed to the IDEAL small order facility. The point of this new feature is to merge the forex access to a single order entry point via IDEALPRO.
- Improved IDEAL (small order) liquidity: there will be an imputed small order quote 1 pip outside the interbank BBO. Small orders will execute against these prices to ensure that small orders get reasonable fills. This feature combines with the previous one to produce a seamless facility. Small orders get treated like odd-lots and get a slightly worse fill but the maximum additional cost is roughly $2.50 and small orders are infrequent as they are for balance flattening or conversion (as opposed to trading).
Next on the FX list:
- additional liquidity providers (banks)
- possibility to trade larger sizes per order
- additional currencies (ILS, SGD, NZD, NOK, DKK, MXN)
- margin methods
That seems logical to me as you're effectively taking two vs-USD positions when you enter into a cross rate, each at 2%. Are other brokers 2% combined on cross rates?Quote from TGM:
The margin on cross rates is about 4% and that is the major flaw and the only flaw left.
Another aspect of IB's FX trading that seems awry is the 2% margin being both an initial and maintenance level. You effectively can't use the 2% and have any breathing room. I mostly stick to FX futures where this isn't an issue.
Quote from Trader KGB:
That seems logical to me as you're effectively taking two vs-USD positions when you enter into a cross rate, each at 2%. Are other brokers 2% combined on cross rates?
Another aspect of IB's FX trading that seems awry is the 2% margin being both an initial and maintenance level. You effectively can't use the 2% and have any breathing room. I mostly stick to FX futures where this isn't an issue.
LOL. it may be logical since they margin each leg of the trade. but no one else margins each leg. They should go to a more portfolio margining
I took a closer look at this and how other brokers handle it and I agree. I wonder if they have any plans for a portfolio margining setup.Quote from TGM:
LOL. it may be logical since they margin each leg of the trade. but no one else margins each leg. They should go to a more portfolio margining