Zero spread on ECNs???

Y

yigal

Hi everyone,

Does anyone know why they sometimes have a zero spread on Currenex and other ECNs, say 1.4150 bid and 1.4150 ask that dont match. As far as I understand any matching orders supposed to be filled as in the case above 1.4150 bid is supposed to match 1.4150 ask and both orders should have been filled.

Regards
 
I'm no expert , but do institions actually take positions from other institions or simply compete to offer best price to private /(retail)traders , i suspect the latter, atleast most of the time atleast , in which case private and institional quotes are treated very slightly differently , otherwise they would match , probably quite a lot ,causing probably unwanted trades for the insitions, they probably try to avoid trying to get involved in actually predicting the market ( which would be nescessery for atleast one side of 2 institions matching and tradingat zero spread price), they are interested in taking thier 1 pip profit spread, in practice from private clients,just my thoughts , as i say ,no expert .
 
Credit Arbitrage.

Client X has credit to trade with client Z

Client y has credit to trade with client Z, but not x

You (client Z) can trade with both x and y.

Client x enters a 1.4150 bid
Client y enters a 1.4150 offer.

The 1.4150's wont match x against y, but you, client z, can see and trade against both.
 
Quote from henry76:

I'm no expert , but do institions actually take positions from other institions or simply compete to offer best price to private /(retail)traders , i suspect the latter, atleast most of the time
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I think your hypothesis is pretty close to the mark.

I was recently using a Currenex hub where the spread would occasionally hit zero. I haven't seen this phenomenon on either Hotspot FXi or IB/IdealPro. One might assume that an ECN would never allow a locked price, as the orders would execute against each other instantly. However, Currenex is known to not always operate as a true ECN (detrimentally so). I think in this case, as you pointed out, that it is perhaps two banks bidding and offering at the same level, but which do not seek to facilitate each others' orders.
 
fxsomebody
this sounds good for the retail traders,... they can match all clients, right?
Or what is the disadvantage?

Thanks
 
this is how cnx system work. it is not only zero, somtimes (about 100 times a day) it can be negetive, and some traders use it to make money, you just need to use their api and has a fest connection to cnx servers farm, so you can excute both sides before the one that has the wrong quot fix it.
 
Quote from abdul66666:

this is how cnx system work. it is not only zero, somtimes (about 100 times a day) it can be negetive, and some traders use it to make money, you just need to use their api and has a fest connection to cnx servers farm, so you can excute both sides before the one that has the wrong quot fix it.
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And if you do that, you'll be blacklisted faster than you can say "hubba-bubba."
 
danger, my brother from a different mother what is up!

I think the size of the order might have something to do with this also, for example 1.2 Bid at 62 and 1.6 Ask at 62, if both sides do not allow partials there could be no fill, until someone steps in front with price, or matches size.

It would be hard to execute this because it is truly random and you will never know how long it will last and when somebody will change an order to match the size.

As far as what pros do on CurreneX, retail traders generally do not get RFQ and RFT on their platforms. And they also communicate with each other, and basically know each other by name etc.

Danger did you get your system worked out, you know the multiple platform one?

Oh and fxsomebody is a wheel at CurreneX.

The Ever Informative VIPER
 
Quote from TradeViper:

danger, my brother from a different mother what is up!

I think the size of the order might have something to do with this also, for example 1.2 Bid at 62 and 1.6 Ask at 62, if both sides do not allow partials there could be no fill, until someone steps in front with price, or matches size.

It would be hard to execute this because it is truly random and you will never know how long it will last and when somebody will change an order to match the size.

As far as what pros do on CurreneX, retail traders generally do not get RFQ and RFT on their platforms. And they also communicate with each other, and basically know each other by name etc.

Danger did you get your system worked out, you know the multiple platform one?

Oh and fxsomebody is a wheel at CurreneX.

The Ever Informative VIPER
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What's up Viper-dude? The institution (allocator) that we're working with (that funds our traders through their hedge funds) recently set up a few test accounts at vCap futures for some traders to trade on the CAX (Currency Aggregated Exchange). That's supposed to go live in a week or so (famous last words), as I am told. Can't wait for that. The institution is also working on their own aggregated feed (as I am told), but I don't know when that's going to be ready. It seems that more and more hedge funds, prop shops, etc. are aggregating in-house for better liquidity, pricing, and redundancy.

What are you up to? PM me if you wish.
 
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