Can this inverted spread be real?

http://img203.imageshack.us/img203/9176/spreads.png

Hello,

I have a demo account with advanced markets and since the adp came out i have been witnessing huge inverted spreads. Check out the image, -16 on EUR/USD, -22 on EUR/JPY etc. This is not for just a second, it has been consistant for the last 10 mins or so ( now -16 and -26!).

Is this even possible? I know inverted spreads can happen in the real market, but for sustained periods I can't see how this works. According to my demo, which says there is plenty of liquidity in the quotes, I could be buying and selling again and again for 20+ pips gain each hit. I would have made hundreds of thousands of dollars in the last 10 mins????

Is anyone live with them? What are the quotes you are being offered and how is execution?

Spreads have just returned to normal after getting to over -50 on eur/jpy for almost 20 minutes

You must be a rich man now (-:

its an anomaly in the matrix. most brokers mention explicitly in their t&c's that they will not pay out for trades taken on -ve spreads.

Yep, but some time occasionally i have seen 0 spreads and some +ve spreads which exist for few millisec on my Metatrader platform

Advanced Markets claim they are not a market maker. They also claim they are not an ecn. They describe their model as direct market access (DMA). I have not as yet been able to find a clear explination of the difference between their model and all the ecn and stp guys out there. Their promo videos are very vague. From what I can gather, they have 12 liquidity providers and the quotes you are recieving are directly from these 'major fx banks'. I have not found any info however on which banks they are, which is strange. They also claim your orders are sent directly to these banks.

So... AM are just a middle man. These quotes are not offered by them, but by the 12 liquidity providers and so they would have no reason to cancel any trade. My guess is that it was a demo platform problem. Was hoping to hear from some live users.

i heard a story about a guy who made 70K off of a $300 account when FXCM did the same thing. they didn't have anything in their contract against it, so they had to pay him. all he did was put in trade after trade lol.

BRB opening Advanced Markets account, then buying hookers and islands for all FF members!!! LOL. Sorry for the joke. I doubt you can trade those spreads on a real account. I'd think arb traders would be all over that and there's no way for the deal to be available for whole seconds at a time, let alone minutes at a time in a real market environment w/o being arb'd away. But hey, prove me wrong and laugh all the way to the bank.

id like to hear more stories like this!

Yeah, what the hell. Try and trade the inverts and see if they'll pay before they fix the leak. You'll be the retail arb king. Most likely won't pay though.

Do you think it's a leak?

If a broker is taking offers from multiple banks it really is demand/supply of each bank or liquidity source to determine its own price. If you have a good price from one bank and sell to another bank with the "bad price" then I don't know if this is necessarily a leak.

It would be a good exercise to exploit this and look into it further.. especially if you are noticing that different banks are offering "good" and "bad" prices at different times. This means that you are collectively beating more than just one bank and have a higher chance of the bank not noticing before telling the broker to fix it or screw off. If I were the broker I would take advantage of this without passing it off to the customer lol... maybe they don't notice themself.

Jag

Discount prices can only happen in the real interbank market if credit standing is inhibiting a match, i.e. you want to sell, but the guy bidding 11 is some small name you cannot do, so you offer at 10 hoping somebody will take it from you. As to the bucket shops "models", the only model they have, is to take your money away as soon as possible, the rest is illusion.

The question is where is that market depth coming from - a demo or a live order book? I'm guessing (a wild one at that) it would all be demo, thus not a true representation of the live quotes.

I guess you could just ask them.

This happened to me with my ECN broker (live account) on Non-Farm a couple of months ago. EURUSD was 20-30 pips crossed for several minutes, and I just kept buying-closing, buying-closing, buying-closing.

But it's rare that there's enough liquidity to do this. I've tried many times since then and have always had trouble getting filled.

Rob