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Bid higher than ask!

  • #1
  • First Post: Aug 16, 2007 3:44am Aug 16, 2007 3:44am
Well I just saw the strangest thing I ever saw regarding spreads after the U.K retail sales numbers just now. I'm not going to list my broker since I'm new and that's against the rules, but I'll tell you it's an comish based ECN and not a market crook, er... I mean maker :-)

The bid on GBP/USD was higher than the ask for several moments. The EUR/USD and AUD/USD, then EUR/JPY last. It was several pips. I actually bought GBP/USD and thought well if I could flip it, why not! The spread corrected after my buy (because of?), and I was gettign ready to place a EUR/JPY order but those also corrected. Goof up at the broker? I would think the broker would match orders internally if nothing else. Has anyone seen this before?
  • #2
  • Aug 16, 2007 3:51am Aug 16, 2007 3:51am
Quoting Pip Hunter E
Well I just saw the strangest thing I ever saw regarding spreads after the U.K retail sales numbers just now. I'm not going to list my broker since I'm new and that's against the rules, but I'll tell you it's an comish based ECN and not a market crook, er... I mean maker :-)

The bid on GBP/USD was higher than the ask for several moments. The EUR/USD and AUD/USD, then EUR/JPY last. It was several pips. I actually bought GBP/USD and thought well if I could flip it, why not! The spread corrected after my buy (because of?), and I was gettign ready to place a EUR/JPY order but those also corrected. Goof up at the broker? I would think the broker would match orders internally if nothing else. Has anyone seen this before?
yep in a fast market I have seen this quite often and I believe you are speaking of MB/EFX.
  • #3
  • Aug 16, 2007 3:55am Aug 16, 2007 3:55am
I'm not allowed to say since I'm nooberiffic.

But let me ask you, have you been able to flip lots? Buy on the low ask, and then flip it to sell on the higher bid? Or vice versa?
  • #4
  • Aug 16, 2007 3:59am Aug 16, 2007 3:59am
Quoting Pip Hunter E
I'm not allowed to say since I'm nooberiffic.

But let me ask you, have you been able to flip lots? Buy on the low ask, and then flip it to sell on the higher bid? Or vice versa?
I have only benefited maybe once or twice for a few pips because I had preset orders in. It happens so fast, I can't see being able to exploit it without some kind of fancy automation exploitation auto trader :
  • #5
  • Aug 16, 2007 4:02am Aug 16, 2007 4:02am
Well it lasted for what seemed like an eternity after the retail sales news. When I placed my order, the spread corrected immediately and a large down-candle was drawn. It seems like my order might have corrected the gap somehow..... very strange.

In any case I'd be happy to act as market maker (not crook) and pass orders between buyers and sellers for profit if they want me to :-)
  • #6
  • Aug 16, 2007 6:56am Aug 16, 2007 6:56am
I tried buying the lower ask but couldn't do it at MBT
  • #7
  • Aug 16, 2007 8:25am Aug 16, 2007 8:25am
I have seen this too on EFX during news. I think its very risky to try and arb it, even with limit orders and automation(for quickest possible reaction time). If you get a fill on the first order, the risk of no fill on limit orders or slippage on stops/marketorders is high on the exit of such a trade, since this occurs only in fast markets. If there were basket orders (ideally with a fill or kill option) on this platform, it would be worth a try with the API.
  • #8
  • Last Post: Aug 16, 2007 8:41am Aug 16, 2007 8:41am
You are referring to the secret ....Whack - A - Mole ....strategy, developed by carnival workers to get alpha, in forex funds they manage.
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