How are large trades filled?

How do retail spot brokers fill orders that are large enough to move 1 pip? Say you buy 1 bln of usd/cdn at 1.1000 but the 1 bln of needed sellers span 1.1000-1.0001. What actually happens with your order?

Or does this scenario just doesn't happen on a spot retail account?

If you are looking to sell 1 billion cad, you find someone who wants to buy the same amount. If there isnt 1 person willing to fill that order, you have to find more than one. Thats what liquidity networks etc are for.

Does the retail brokers everyone uses here help you pool the sellers? Or would they hold your order until the 1 bln sellers come and fill it all at once?

Theres always OTC liquidity to cover that stuff. But you'll find that most brokers dont even enter the liquidity market for any orders. They just trade on their side and use the profit to cover their winning traders (or boot them off) and the rest get railroaded.

If you can find someone willing to sell you that much, sure you can do it. There may be banks/hedge funds/rich individuals willing to trade that with you. But if you just want to do it with a broker (Broker XYZ giving you access to Currenex/EBS/Reuters) then you will have to live with knowing that you may not get the exact price you are looking for. Depending on how much liquidity is available, you could get an average price 0-100 or more pips away from what you wanted. The best way to ensure that you get closest to what you're looking for,is to execute that order over a span of several minutes/hours. If the mkt is ranging, it will come back to that price several times. Every time it does, buy as much as you can. Repeat till the entire order is filled.

Breaking up the trade would be a good solution. I guess retails brokers aren't the ones you would count on to go out of their way to fill an inconvenient trade.

Thanks for the input guys.

taskid is on the right track. it's called the ladder system. usually, the most you will for sale or purchase in the market is about 1-3 million units of the base currency at a specific price. because of this, you're order will have to be filled at multiple prices depending on the liquidity available at those prices. it's sort of like the rungs on a ladder (hence the name) the first rung has 1.5 mil at your price, the second rung has 1.5 mil at a price that is a pip or two worse, the third has 1 mil at a price a pip or two worse etc. here's how it would look if graphed out:

http://i203.photobucket.com/albums/a...wok/ladder.jpg
your broker would just keep filling your order at the next available price until your entire trade was filled. if there wasn't enough liquidity in the market, you would only get a partial fill. also, a quick thing to note, when doing this, you move the market against yourself. if you notice, on the buy side, each price gets proggresively lower. as your orders fill, the market ticks down to the next price when that order is filled. if you had bought all of the 8,750,000 listed on the buy side, you have just moved the market 15 pips against your initial entry point. usually, this doesnt matter for people who dump large amounts of money because they arent interested in the short term or small pips. just something to keep in mind.

a quick note, my example of the ladder is exaggerated. there is usually more liquidity at the levels and the levels arent as spaced apart. i did this to illustrate a point.

i hoped this helped!

That helped a lot. Thanks for the clear explanation. I was originally thinking along the lines like this but didn't know if the broker will automatically match the orders progressively as you illustrated.

I'll try that out as soon as I get a million in my account.

Are you sure about this? Also, on your illustration shouldn't the buys and sells be switched in places?