MB Trading Futures - Introduction

Quoting jleblang

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Hi Smjones ~



We do not allow hedging in the same account. As a solution though, many of our clients choose to open and fund two accounts. We then link the accounts together so that they only have to log in one time to trade both accounts.

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Quoting quathar

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Hey Justin,
would appreciate some more clarification:

1. You mean that it is NOT possible to have simultanious short and long positions open in the same pair?
(Say that I trade long in EUR/USD, and it goes down 100 pips, if I were to open a short position at that point, would my long position automatically be closed, or alternatively, would the system not allow me to do that?)
If this is the case, would you mind explaining why, and if you plan on supporting it in the future?

2. If I open two seperately funded accounts, would it then NOT be possible to offset possible margin-calls, i.e. if I have a short position in one account and a long in the other and the long position drops below margin requirements, will that account recieve a margin call?
If so, is there an easy/fast way of transferring funds between accounts?

3. Do you have a limit on how many open positions you can have at the same time? I'm interested in auto-trading, and trades may overlap frequently in my system.

Thx.

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Quoting jleblang

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Hi Quathar ~

 

1. Your understanding of our hedging rules is correct. On our system you can not be long and short the same currency pair at the same time. If you were long the GBP 5 lots and went to short 5 lots, you would be closing your position.
2. Each account will be completely separate from another.

We do allow our clients to link their separate accounts together for easy switching between the two. See example:

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Quoting mmccormac

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"I notice that 3d Forex is located in 1926 E Maple, El Segundo, CA. In fact, sharing the exact same address as MB Trading futures. This doesn't really put me at any ease about my suspicion about the tight relationship. But why do you publicly defend yourself as an "ECN" by saying "all our orders go to our liquidity provider" when that entity is located in the exact same building? This is why I think you misrepresent yourself. A person can be fooled into thinking you are objective to your customer's positions when you claim you are independent from your upstream provider. But this independence seems to be in your corporate registration only.

Smells like fish."

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Quoting jleblang

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Mmccormac-

Sorry, but you have a few things confused. The ECN technology behind our software which allows our customer orders to interact with each other along with MBT's liquidity pipelines is housed at MB because that was where it was written, but it is being moved to a separate location known as TDFX. MB isn't the liquidity provider, they are the technology piece. The liquidity providers are multiple banks, one of the largest collections of banks, in fact, through both direct routing and various pipelines. There is no conflict of interest. That would be like saying in the stock market that when you buy through ARCA or ISLD, they are the opposite side of the trade. They are the technology piece that puts buyers and sellers together from ANYWHERE.

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Quoting mmccormac

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So tell me what you are doing with those $10,000 orders. What bank would take that "straight through" without you holding the orders and sending them in bulk (aka Market Making)?

EDIT: What are the "and various pipelines"?

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Quoting jleblang

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Mmccormac-

Sorry, but you have a few things confused. The ECN technology behind our software which allows our customer orders to interact with each other along with MBT's liquidity pipelines is housed at MB because that was where it was written, but it is being moved to a separate location known as TDFX. MB isn't the liquidity provider, they are the technology piece. The liquidity providers are multiple banks, one of the largest collections of banks, in fact, through both direct routing and various pipelines. There is no conflict of interest. That would be like saying in the stock market that when you buy through ARCA or ISLD, they are the opposite side of the trade. They are the technology piece that puts buyers and sellers together from ANYWHERE.

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Quoting jleblang

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We don't hold anything 'in bulk.' If you trade on the platform, you can see clearly that $10,000 orders are treated like any order and hit a provider immediately. There is no delay and you can see the size disappear on our Level 2 when you hit the bid or offer.

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Quoting mmccormac

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So as long as the "software" that routs the orders to the actual liquidity providers is under a seperate name then it's considered "ECN"?

http://fxtrade.oanda.com/share/i/fxtrade_view_lg.gif

OANDA is a Market Maker. Our FXTrade platform is linked directly to the Interbank FX Market.

Guess Oanda only needs to call "Oanda Electronic Market Maker" a routing software and create a different business name for it... Guess then they will be considered an ECN as well. No conflict of interest at all.

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Quoting mmccormac

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Yes. Guess who buys those $10,000 orders... Hmmm, would it be TDFX. So go ahead and defend your status as an ECN. Anyone that really knows how the interbank network is run will know that this is a total joke. I don't care if you call yourself an ECN but at least be honest about who is buying those mini lots.

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Quoting mmccormac

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Question posted to a MB Trading rep:

Can you tell us how often (if ever) a non trading client of yours (e.g. bank) accepts your customer's limit orders within the spread? Do they even watch them? Or does the 3d forex platform only tend fill these limit orders (assuming another trader doesn't take it) when they match the quoted bid/offer by said banks? Thanks.


reply:


MBT-Steve
MBT Trading
Registered: Apr 2005
Posts: 154
01-16-07 11:03 AM

Some see it. 3DFX's goal in time is to get as many banks to see the orders as possible.

Regards,

Steve


So what is going on? 3DFX (MB Trading) is taking the orders.

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Quoting jleblang

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No. 3DFX is acting as a counterparty to every trade, that is the trade with the customer and the trade with the bank. The reality of it is that TDFX is sending the orders of the customers to the banks. The bank does not know the customer and the customer does not know the bank. That is the job of 3DFX. Just to be clear; 3DFX does not take the risk....it only matches orders. However it must be the counterparty to each order in order to clear the trades.

Just like in the stock market, there is a process called "clearing." Let's say that your order matches off to buy EURUSD with Goldman Sachs. You don't have a relationship with Goldman Sachs that binds you and them to make good on that trade and pass money back and forth. We do, that's the point of a firm. So even though you create the execution and you get the price, from a legal perspective, we are exchanging with them on a clearing basis and giving you the execution. Thus, we, and ALL firms, will always be the counterparty. Nothing strange about it.

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Quoting mmccormac

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We are going in circles here. Bottom line you can not take a $10,000 order to the interbank network and get it taken (unless you bundle them-hold them).

Other things:

Your commission is ($5.00 USD) $9.75 to buy 100k and 9.75 to sell 1 standard lot. So your paying basically 2 extra pips RT with that commish you charge.

Your Swap/IRD/Rollover is some of the worst in the business (charge 2-3 times what you pay).


That being said I think you have an ok platform for small traders that don't hold positions overnight. But it is a concern that you keep insisting that you STP the mini lots. Anyway good luck Justin.

EDIT: commission quote based on trading GBP/USD.

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Quoting jleblang

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I don’t think we’re going in circles at all, so let’s try this. How do you “know” that you cannot take a $10,000 order to the interbanks directly? Have you tried? Are you a platform yourself, and have you gone to a bank and said “Here is our financial position, if we send you x volume in smaller increments, will you execute our customers at smaller increments?”

Now, there are a few possibilities here. One is that you work for another platform, in which case, this is basically a colossal waste of time. But, let’s assume you don’t, and while you won’t get any answers from me that would jeopardize our proprietary technological edge in the field, let me walk you through this.

The vast majority of platforms are deal-desks. They don’t care about the Interbank system.

There have been a handful of companies that have set up forex platforms with good intentions of being non-dealing desks. Most of them are new, have no track record, are under financed, and some even have questionable management. So let’s say that there were ten platforms that set up with good intentions of forwarding this industry. How many of them are actually in a position that the banks on the Interbank system would take them seriously in terms of financial background, experience, and lack of regulatory issues? Do you think if you go to one of the twelve largest banks in the world and ask the question that I posed in the first paragraph that they would care enough about working with any platform in that regard if they didn’t have all of those qualifications that I just mentioned?

So what are we saying? That five, maybe a few more, platforms are even inclined to ASK that question, and how many are truly of the level that the banks would sit down and say, “OK, give us this deposit on hand and send us this much volume, and we’ll do it.” Meanwhile, MB Trading has been around for ten years in the much more regulated stock side, has deep pockets, won Barron’s Best On-Line Broker last year, and doesn’t have a management team with a U5 longer than the IRS Tax Code. Do you think that might be someone that the banks would be interested in moving forward with?

I’m just throwing things out there. But you think you know it’s only handled through bundle trading, so it doesn’t matter what I say. Give me a break.

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