RefcoFX vs. Oanda

agree that conceptually the CME eFX framework should be the way to go - eagerbeaver, you may find this interesting: http://www.elitetrader.com/vb/showt...9364&perpage=6&highlight=cme efx&pagenumber=1

however 1) not sure the volumes are there yet to do large size quickly without slippage, 2) not sure that transaction costs all in are as good as on forex spot (if you go with the right broker-dealers, or even better from a credit risk, 'true' spreads etc standpoint, with the right ECNs, i.e. where there is little to no chance that some measure of 1-2pips 'individual pricing' is applied against you once you're in the trade...)

Steve (IB), you've always been very helpful, i understand it's pretty easy to open an IB Universal acct (min. $25K?) and trade spot FX via your ECN-type offering (IdealPro?), and/or CME eFX pairs, not sure via which platform tho? (plse kindly confirm, incl additional set-up, echange etc costs if any)

can i trouble you with this? say CME spread is 1 pip and IB liquidity providers' spread is 2 at this particular point on GBPUSD, whats the cost ALL IN for me as a hypothetical IB customer of doing a GBPUSD1,000,000 R/T, vs doing the equivalent number of CME eFX contracts?

also whats the max. leverage you can offer?

many thanks in advance
 
Quote from eagerbeaver:

from the IB website -- knowledgeable folks, is this bullshit?

"IB is the first broker to provide direct-access forex trading with interbank quality spreads, institutional size and no conflict of interest. Unlike other FX dealers that trade against the customer, IB evaluates multiple major bank dealers and routes its customers' orders straight to the dealer with the best price. "
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"the 1st broker to...", maybe not, but other than that, whats so shocking? i don't use them but i use Currenex and soon Hotspot, same model and they are not the only ones to offer that either, they charge commissions, allow you to place bids & asks etc. if you r worried that they may still be manipulating the spread a bit, 2 things you can always do:
- check with a mate who's also got an account with same broker/ECN (and connects via a different physical location / IP address...), that he is getting the same spreads independent on whether you're both long, flat, in opp. directions etc. this way you'll soon know for certain whether yr broker is 'individual pricing' you by a pip or 2 on the exit, which does happen if u trade with low rep. shops... if thats the case, and u still want to use them, just scale in (as one shld do in most situations...) and you'll normally only get hit on the 1st increment of your trade (which makes it all very bearable) since they wldn't normally stretch the 'individual pricing' thingie too far... other option, switch brokers...
- open an acct with another broker/ECN, e.g. a $1 acct with Oanda just to compare the spreads, pretty affordable innit?
 
Quote from uninvited_guest:

If the spread is 3 pips, I'm down 3 pips off the bat.
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Quote from danoXP:

Technically, you are down 1.5 pips off the bat. Down another 1.5 pips when you close the position.
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No. The original quote is correct.

The moment you've opened a position, both your unrealized P&L and your net asset value are down the full spread, 3 pips. All closing the position at any given price does is transfer unrealized P&L into realized P&L. The NAV itself doesn't change.
 
Quote from 2cents:

agree that conceptually the CME eFX framework should be the way to go - eagerbeaver, you may find this interesting: http://www.elitetrader.com/vb/showt...9364&perpage=6&highlight=cme efx&pagenumber=1

however 1) not sure the volumes are there yet to do large size quickly without slippage, 2) not sure that transaction costs all in are as good as on forex spot (if you go with the right broker-dealers, or even better from a credit risk, 'true' spreads etc standpoint, with the right ECNs, i.e. where there is little to no chance that some measure of 1-2pips 'individual pricing' is applied against you once you're in the trade...)

Steve (IB), you've always been very helpful, i understand it's pretty easy to open an IB Universal acct (min. $25K?) and trade spot FX via your ECN-type offering (IdealPro?), and/or CME eFX pairs, not sure via which platform tho? (plse kindly confirm, incl additional set-up, echange etc costs if any)

can i trouble you with this? say CME spread is 1 pip and IB liquidity providers' spread is 2 at this particular point on GBPUSD, whats the cost ALL IN for me as a hypothetical IB customer of doing a GBPUSD1,000,000 R/T, vs doing the equivalent number of CME eFX contracts?

also whats the max. leverage you can offer?

many thanks in advance
More...

2cents, you can open an account with IB directly from our website. It's quite straightforward. Minimum account size is $2,000 or equivalent. The minimum size on IDEAL-Pro, our FX trading platform, is $25,000 or equivalent. The leverage on currencies is 50:1, except for Yen and HKD which are 33:1. Thus, you would need $500 margin to trade the minimum $25,000 size on IDEAL-Pro.

The software you use is our own proprietary software, the TraderWorkstation (TWS). You are able to trade FX, futures, stocks, bonds and options from the same account. You should check on the website under Fees for full details. If you're trading the CME futures and have an account in your name then there is a US$10 monthly charge for real-time market data. This is waived if you generate $30 or more in commissions in the month.

IDEAL-Pro would cost $20 per side ($40 R/T) for that transaction.
You'd need to do 16 futures contracts for that size, which would cost between $34-$48 per side ($68-96 R/T) depending on your monthly volume.

You are able to fund your account and withdraw funds from your account in any of the major currencies.
If you are trading multiple currencies, then you may also save on IDEAL-Pro due to the fact that we look at your true position - i.e. your net cash position. For example if you bot Euro for $1m, and then sold GBP for $1m. This would leave you with long Euro vs GBP position which you could trade out of directly if you wanted to; instead of doing 2 seperate trades against the $.

Hope that helps!
 
Steve-

What has been IB's experience with folks trading at these type of leverage numbers?

Are they NET winners/losers/break-even?
 
Quote from tomcole:

Steve-

What has been IB's experience with folks trading at these type of leverage numbers?

Are they NET winners/losers/break-even?
More...

Tom,
I actually haven't checked, and it wouldn't be that easy to check as I believe the majority of our clients are not using anywhere near full leverage. But then even if I knew the stats I wouldn't be able to disclose the info.

Many years ago I worked in the FX market in Asia, and my general observation was that everyone maxing out on their leverage eventually lost all their account. In those days there were hundreds of bucket shops who offered as much leverage as you cared to ask for. They simply acted as a transfer of wealth.
Steve
 
Funny, I worked in Asia as well and saw similar things as well.

IMHO, I find it a bit disconcerting that so much leverage is offered to those who have trouble with it. Kinda like credit card companies that let college kids run up big bills, then spend their summers working to pay off their bill.

But I do admire your professionalism in responding to my question!
 
not advisable to use high leverage, thats for sure, unless you know what u're doing... but then if you don't, why bother trading at all?
 
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