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Prime of Prime Broker

Quoting Forexia
{quote} Not many traders trade during news anyway. I tried trading news a few times, the result is really mixed so I would imagine it would be similar to other traders as well unless you have inside information. But to forbid it outright is not fair. So what, when they trade it and win it's fine and when we trade it and win against them it's "toxic flow"? What happened to "taking it like a man", something they always say to us whenever we lost because of them screwing us over? And we don't even manipulate the price and do those dirty last looks...
Banks (LPs) nowadays they do everything except what they real were create for - borrow money to entrepreneurs /clients. Nowadays they only care about trading, they even trade the mortgages they do to their customers in the market. You put your money in the bank, they use it to trade in financial markets. You trade FX, they take the other side trying to catch your money free-rolling with the money we put in their hands. If everything goes as planned, huge profits... if something went wrong, they change execution price and take all the money in your trading account. If everything goes catastrophic they force Central Banks to bailout them... Long live Capitalism or should I say Bankalism economy?
Quoting LostLucky
{quote} Banks (LPs) nowadays they do everything except what they real were create for - borrow money to entrepreneurs /clients. Nowadays they only care about trading, they even trade the mortgages they do to their customers in the market. You put your money in the bank, they use it to trade in financial markets. You trade FX, they take the other side trying to catch your money free-rolling with the money we put in their hands. If everything goes as planned, huge profits... if something went wrong, they change execution price and take all the money...
Yeah basically they take your money no matter what.

You lose, they win - they take your money

You win, they lose - they take your money via bailout

The ONLY way that you might be able to make a little bit of money is if you invest in those banks' stocks so when they take $1 trillion from you, they will give you $1 back.
Make your losses in demo. Earn your profits live.
It seems the prime of prime business just got smaller as Prime brokers have revisited margin FX brokers to see the quality or lack of balance sheet assets they have.

This seems understandable since the fall out of SNB still unfolds and the banks credit departments are looking at what assets they can salvage if a broker goes to the wall.
So what does this mean now for second tier brokers?

Reduced leverage, higher execution costs, product limitations and more than likely contraction.

Once the regulators come down hard on B book brokers ie those who don't have assets behind them to support their 100% of the risk take against client positions , then the margin fx broking market will shrink further leaving only the brokers with real assets left.
Ha-ha, sharks feel smell of blood! I'm not agree with u Lasty.
"everyday market volatility, which drives up volumes of trade and the amount bank dealing desks can make from trading, has surged threefold on major currencies"
" banks investing again in FX now. It has been one of the best performing segments over the past year and that has drawn attention"
Quoting M967
Ha-ha, sharks feel smell of blood! I'm not agree with u Lasty. "everyday market volatility, which drives up volumes of trade and the amount bank dealing desks can make from trading, has surged threefold on major currencies" " banks investing again in FX now. It has been one of the best performing segments over the past year and that has drawn attention"
Nothing like a good fishing trip M967

FX Volumes will continue to grow agreed.

Broking houses not so.

Capital requirement is something regulators are keeping an eye on to run a broking business and this can only go one way.

Credit has already taken a hit as several prime brokers (banks) (those who give broking houses credit in order for the liquidity providers to supply prices to aggregated platforms) have demanded more assets.These are not client funds. These are what the broker has in case another SNB like event occurs.

So what happens when a broker cant get Prime broker (banks) credit ?
They search for someone to who can and that will come at a cost. To recover those costs the broker either has to take a reduction in income,increase the spread or take on the risk themselves commonly known as B-Booking.
B-book brokers hate winners.They are betting that you will lose.
The risk here is that if the brokers B-Book loses so does the client and suddenly they can disappear. And haven't we read about so many on this forum who have.

The only way for a trader to be sure about their broker is to ensure they are well capitalised (outside of client funds), regulated in a recognized centre and if possible check out where they operate from ie visit their premises.

Many rookies look at the price or are lured into a financial incentive and forget about getting their money back.

Prime brokers (banks) worry about getting their money back first and so should you.

Happy punting
I did compare prices from FIXI, Velocity Trading, CFH Clearing and FC Stone.

For GBP/USD, FC Stone is considerably better than the other venues. I just took 2 different snapshots (on Asia time) a few minutes apart for a 25mio clip VWAP. (I did not do that for Velocity Trading as it doesn't have VWAP in the particular piece of technology I have from them (or I don't know how to configure it).)

1. FC Stone shows me a VWAP 2.1 pip spread, while CFH Clearing is showing me 3.0 pips, and FIXI is showing me 2.6 pips.
2. FC Stone shows me a VWAP 2.0 pip spread, while CFH Clearing is showing me 3.0 pips, and FIXI is showing me 2.5 pips.

I have done more detailed studies and constructed VWAP pricing from Velocity trading. Overall, FC Stone prices are consistently better than all others. During different times of the day FIXI, CFH, and Velocity Trading change relative prices, and neither one of them seems to have a consistent pricing edge on another.

That being said, I also have the option to RFQ which should improve the pricing, but I am unsure to which levels.

Does anyone have any experience with FC Stone to share?
Quoting cabeltrader
I did compare prices from FIXI, Velocity Trading, CFH Clearing and FC Stone. For GBP/USD, FC Stone is considerably better than the other venues. I just took 2 different snapshots (on Asia time) a few minutes apart for a 25mio clip VWAP. (I did not do that for Velocity Trading as it doesn't have VWAP in the particular piece of technology I have from them (or I don't know how to configure it).) 1. FC Stone shows me a VWAP 2.1 pip spread, while CFH Clearing is showing me 3.0 pips, and FIXI is showing me 2.6 pips. 2. FC Stone shows me a VWAP 2.0 pip...
what platform ?
what sort of monthly volume ?
does that include an all in price or is their brokerage ontop ?
?
Quoting lasty
{quote} what platform ? what sort of monthly volume ? does that include an all in price or is their brokerage ontop ? ?
Integral, but liquidity apparently doesn't change much on other platforms, and they do have a few available.

100M a month is enough.

It has brokerage on top, it starts on $20 per million per side and it goes down to $7 per million per side in case monthly volume is higher than 1 yard.
I did see a few comments of IG Markets here in this thread. I am not sure if they are a PoP, but they seem to do somewhat decent business.

I did contact them and it seems impossible to get detailed information about prices other than top of book before having a live account with them... No live streams with full book available, no one to take snapshots of the liquidity...
Quoting cabeltrader
I did see a few comments of IG Markets here in this thread. I am not sure if they are a PoP, but they seem to do somewhat decent business. I did contact them and it seems impossible to get detailed information about prices other than top of book before having a live account with them... No live streams with full book available, no one to take snapshots of the liquidity...
Invast Australia offer Integral,Flextrade,Hotspot for POP clients ..
Frankly disappointed with FCStone... On Currenex their liquidity is ridiculously low and their spreads are very high. They also demand that part of the client money be considered non-segregated which is a big red flag for me (same goes for FIXI). I spoke to people on their London desk and found them largely non-responsive... Btw they offered me $15 per mil with no minimum volume, so if you stick with them you should at least push for this.

Overall IG DMA has great liquidity and spreads through their CX platform, but their commissions are huge and spoil the whole thing: $60 per million when I get $15 with Fixi and Duka and $20 with FXCM ... I still keep them among my brokers in case I need to use higher leverage.

Here's a snapshot of IG prices and DOM on majors (London session)
Attached File(s)
File Type: pdf IGCX.pdf   122 KB | 539 downloads
Quoting lasty
{quote} Invast Australia offer Integral,Flextrade,Hotspot for POP clients ..
Thanks, Australia is an interesting country to trade at because of the regulatory framework. Invast seems to have strong technology solutions, the pricing is very good, but is not the best that I've seen (although it very likely is consistently better than the feeds from CFH Clearing, FIXI and Velocity that I mentioned in my post above), and there is not a whole lot of depth in the book (I was told that will change in the near future).

Quoting actalis
Frankly disappointed with FCStone... On Currenex their liquidity is ridiculously low and their spreads are very high. They also demand that part of the client money be considered non-segregated which is a big red flag for me (same goes for FIXI). I spoke to people on their London desk and found them largely non-responsive...
Thank you for this valuable information actalis. I was told that FC Stone United States let you segregate money in case you open a futures account (which works as a trick to get your funds segregated).

How is your experience in terms of execution? Can you hit the prices well?

Quoting actalis
Btw they offered me $15 per mil with no minimum volume, so if you stick with them you should at least push for this.
Thanks for the pricing tip, if I go with them, I'll definitely negotiate this.

Quoting actalis
Overall IG DMA has great liquidity and spreads through their CX platform, but their commissions are huge and spoil the whole thing: $60 per million when I get $15 with Fixi and Duka and $20 with FXCM ... I still keep them among my brokers in case I need to use higher leverage. Here's a snapshot of IG prices and DOM on majors (London session)
This screenshot you sent shows GBP/USD VWAP spreads of (I assumed that the volume showed on the book is measured in standard lots, if it is Mio, the pricing would be incredibly amazing, could you confirm this?):

1M 1.1
5M 1.41
10M 1.65
17.7M 2.00

If the time is 08:27 GMT, I tend to think that those are not very good prices.

How is your experience with Duka? Do you sweep the book over there? If yes, how is execution?

How about FIXI? Any comments are appreciated.
Quoting cabeltrader
{quote} This screenshot you sent shows GBP/USD VWAP spreads of (I assumed that the volume showed on the book is measured in standard lots, if it is Mio, the pricing would be incredibly amazing, could you confirm this?)
Yes, those are 100K lots. Here's another snapshot I took today. Assuming you could tap the DOM in one shot, you would get 15M VWAP at around 1.6 on GU and 0.7 on EU, with monthly volume above $100M, you'd have to add $30 commission per mil.

Quote
How is your experience with Duka? Do you sweep the book over there? If yes, how is execution?
How about FIXI? Any comments are appreciated.

Too early to tell as I'm still testing the water with various brokers hence with orders spread thin at just a couple of lots. I like the liquidity of Interactive Brokers but rollover suck, Duka is strong on the EU pair, FXCM on the GU pair. IG is expensive but execution is good and they offer 200.1 leverage on majors. FIXI prices are ok and they offer the best swap costs which is an important factor as I tend to hold positions over several days.
Attached File(s)
File Type: pdf IGCX2.pdf   113 KB | 478 downloads
FIXI just merged with AXI lol
Quoting actalis
{quote} Yes, those are 100K lots. Here's another snapshot I took today. Assuming you could tap the DOM in one shot, you would get 15M VWAP at around 1.6 on GU and 0.7 on EU, with monthly volume above $100M, you'd have to add $30 commission per mil. {quote} Too early to tell as I'm still testing the water with various brokers hence with orders spread thin at just a couple of lots. I like the liquidity of Interactive Brokers but rollover suck, Duka is strong on the EU pair, FXCM on the GU pair. IG is expensive but execution is good and they offer...
Where's that screenshot from?
Quoting plotinus82
{quote} Where's that screenshot from?
IG Markets
After doing some very very deep research and having a look around and talking to a lot of people.

ISAM (International Standard Asset Management) has formed a prime of prime shop called IS Prime.

ISAM was the best performing systematic hedge fund in 2015 returning 52% and is a 1 Billion AuM CTA with allocation programmes.

Looked at their liquidity,

0.1-0.3 on EURUSD, I would recommend people to have a look into it.
Thread like this is great!! Although I don't trade with a PoP, and probably won't for quite a while, it's great to get an insight into the dealings of volumes of this size. Incredible!

Thanks all, really appreciate the insight!
Quoting jakeparkin
Thread like this is great!! Although I don't trade with a PoP, and probably won't for quite a while, it's great to get an insight into the dealings of volumes of this size. Incredible! Thanks all, really appreciate the insight!
Our pleasure guys
Hi guys.

When I see the Order Book provided by LMAX http://www.lmax.com/institutional I'm little surprised.

You rarely see prices on EU with more than 2mio. If a large trader sends a 20 mio buying market order, he gets a huge slippage, right? Why would a large trader trade with them?

Thank you for your answers.
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