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MB Trading Futures - Introduction

  • #6,281
  • Jan 25, 2011 11:21am Jan 25, 2011 11:21am
Quoting jleblang
In a true market, if the bid is 10 and the ask is 12 and you decide that you want to buy at 11, your Limit order becomes the bid at 11 for everyone to see. The quote is therefore 11 by 12 from that point. Anyone who sells at the market hits your bid at 11. You can’t get filled at a lower price if your Limit is truly displayed out to the market. In order for you to get a better fill than 11, that means that someone’s sell order comes in, and the platform decides to fill you at a lower price, which means giving them a WORSE price than the 11, which...
, good luck with these retail traders, i wish you the best
  • #6,282
  • Jan 25, 2011 11:24am Jan 25, 2011 11:24am
Quoting Adal
Three questions:

1. Will the banks providing liquidity also receive the rebate? Since it's an ECN it looks like they should.

2. Do you see a problem if somebody writes an HFT algo and colocates it with you which will do rebate trading on your ECN? Is there a limit on how many rebates someone can receive?

3. If I put a BUY $100K limit order on EUR/USD at 1.3700 and it gets hit after waiting for a time, then I put a SELL $100K limit order at 1.3700 (same price as the first order) and this also gets hit after a while, can you confirm that my total...
Adal,

The banks in the system already get paid for providing liquidity. We can’t disclose the terms.

There is no limit to how many rebates at this time.

Correct math on your third.
  • #6,283
  • Jan 25, 2011 11:27am Jan 25, 2011 11:27am
Quoting PoundTrader
time to change broker, maybe mb can give you better fills, lets see what happens when you place a order
I can say this. I've had four orders problems in four years with MB as my primary FX broker. That's out of literally thousands of trades, and most of the problems were just slippage in a fast market that I didn't mean to trade in. So, in answer to your comment, when I place a trade, I get filled. Just like I should.
FXChant Singing the World of Forex
  • #6,284
  • Jan 25, 2011 11:28am Jan 25, 2011 11:28am
Quoting fxchant
I can say this. I've had four orders problems in four years with MB as my primary FX broker. That's out of literally thousands of trades, and most of the problems were just slippage in a fast market that I didn't mean to trade in. So, in answer to your comment, when I place a trade, I get filled. Just like I should.
good broker, i agree
  • #6,285
  • Jan 25, 2011 12:00pm Jan 25, 2011 12:00pm
Quoting jleblang
Adal,

The banks in the system already get paid for providing liquidity. We can’t disclose the terms.
On Twitter you seem to confirm that the banks will also get paid the rebate, so I'll take that as an yes.

@MBTrading Do the limit orders have to be filled by another MB client to get the commission, or also when they are filled by the marketbanks

@praysomemore Limit orders can be filled by anyone to get the credit, banks or clients

http://twitter.com/PraySomeMore/stat...76845390708736
http://twitter.com/MBTrading/status/29979851305783296
  • #6,286
  • Jan 25, 2011 12:02pm Jan 25, 2011 12:02pm
Justin, I left this post a few posts back. Since you've answered others since that time, you might not have seen it. I know you're bombarded with questions, so thought I'd ask again. Here is what I posted:

That was a nice announcement today and is definitely leading edge. I do have a question regarding what constitutes a limit order. I've seen where a limit order qualifies. I've seen where a take profit order qualifies. Does a trailing stop qualify or does it not since I'm not sure if it resides on the server? A clarification of what qualifies/what does not qualify might make me rethink a few things that I do. Thanks in advance for your help.

Steve
  • #6,287
  • Jan 25, 2011 12:04pm Jan 25, 2011 12:04pm
Props to MB Trading. This is huge and I am surprised at how well you kept the lid on this thing until today. This will definitely add to my bottom line and it proves that you guys are what you say you are. Let’s see some of these other brokers try to match. I’m guessing they can’t.
  • #6,288
  • Edited 12:56pm Jan 25, 2011 12:15pm | Edited 12:56pm
Hi, Justin.

First of all, kudos, this is a genuinely innovative idea, makes it very clear that you are thinking on the side of your customers, and gives me warm fuzzies about MBTrading as a company I can work with and grow with over time.

I'm a software designer who is in the process of turning into a trader, and I've worked with your API in the past. And I'm thinking "with this new cost structure, why would anyone ever use a market order for any entry or exit??" The only answer I can come up with, other than laziness or ignorance, would be "to be certain of a fill."

So I'm thinking that this new cost paradigm cries out for a specialized automated order entry platform, one that would take the trader's initial limit order and "work" it for an optimal fill. Basically the goal of the software would be to take advantage of the cost advantage of a limit order, while raising the certainty of being filled as close as possible to the certainty of a market order, by adjusting the limit price dynamically, while still keeping it within the spread.

Scenario:

1) The trader says ' I wanna go long here' and clicks a button. This is a trader who might have used a market order in the past, but now she wants that credit!

2) The software places a limit order one or a few pipettes above the current bid, and waits for a fill.

3) The software watches the current bid-ask as it waits for a fill and adjusts the limit order as necessary. Based on parameters the trader has set up in advance, the software can raise its bid in increments, closer and closer to the ask, to increase the likelihood of a fill, or to "chase" the market (up to a preset limit) if it's moving away (NinjaTrader already does something like this). There could also be a time limit feature, where if there's no fill within a certain time the software could throw in the towel and switch to a market order (or more likely a marketable limit order).

These are just some initial thoughts, my mind is spinning... I'm definitely thinking of writing something like this for my own trading, and it won't surprise me to see this sort of a capability appear in a commercial package.

So here are my questions for you:

1) How will this kind of automated order entry affect your business, and have you anticipated it?

2) Is there any limit to how often a limit order can be replaced? On your web site, you define a "non-marketable limit order" as one that is not immediately executable and "rests on the internal limit order book for some period of time." What happens when that "period of time" is measured in microseconds or nanoseconds, as multiple co-located 'bots' jockey to be the next in line? Can your servers handle it? Or will you eventually need to create some kind of time limit, for how long a limit order has to "sit" before it can be adjusted again?

3) Is this going to bring the 6th decimal place for prices into use? If the spread on the Euro is 0.6 pips, which already happens frequently now, can my software put in a limit buy order 0.05 pips above the bid?

These are fun questions to ask, and I'm curious to hear your thoughts. Congrats again on a truly innovative and forward-thinking move.
____________
Look Deeper...
  • #6,289
  • Jan 25, 2011 12:23pm Jan 25, 2011 12:23pm
Quoting Adal
On Twitter you seem to confirm that the banks will also get paid the rebate, so I'll take that as an yes.

[i]@MBTrading...
What I said was that you get a credit for filled limit orders no matter who hits you. We don't disclose terms of payment between us and banks.
  • #6,290
  • Jan 25, 2011 12:25pm Jan 25, 2011 12:25pm
Quoting SteveW
Justin, I left this post a few posts back. Since you've answered others since that time, you might not have seen it....
A trailing stop is not a limit so it would not qualify. A Limit must be at a better price than the market, so if the quote is 10 by 12 and you want to buy at Limit of any price under 12, that order qualifies when it gets filled.
  • #6,291
  • Jan 25, 2011 12:40pm Jan 25, 2011 12:40pm
Thanks for the clear-up.

I read somewhere about MBT providing trading apps for Android and Windows Phone 7 (in the future), but on your site you can find only for iPhone.

Can you tell what's the status of the Android app, and if you expect to get out with the Windows Phone 7 app this year?
  • #6,292
  • Jan 25, 2011 12:41pm Jan 25, 2011 12:41pm
I just heard the news. This is truly revolutionary stuff, MBT. I almost can't believe you are paying so much for the Limits, but I always wondered when you guys were going to eliminate the charge for Limits to increase the liquidity. This has to have the industry scrambling. Just phenomenal work. Love the website too! Pages are very clear and nice comparisons.
  • #6,293
  • Jan 25, 2011 12:54pm Jan 25, 2011 12:54pm
Quoting Adal
Thanks for the clear-up.

I read somewhere about MBT providing trading apps for Android and Windows Phone 7 (in the future), but on your site you can find only for iPhone.

Can you tell what's the status of the Android app, and if you expect to get out with the Windows Phone 7 app this year?
Adal,

Android is expected shortly, easily in Q1. Not sure about Win7, but it is coming too.
  • #6,294
  • Jan 25, 2011 12:57pm Jan 25, 2011 12:57pm
Quoting wannatradefx
I just heard the news. This is truly revolutionary stuff, MBT. I almost can't believe you are paying so much for the Limits, but I always wondered when you guys were going to eliminate the charge for Limits to increase the liquidity. This has to have the industry scrambling. Just phenomenal work. Love the website too! Pages are very clear and nice comparisons.
Thanks wannatrade and everyone else who has commented. Your feedback is appreciated and puts a smile on the faces of the employees who have worked so hard leading up to the announcement today.
  • #6,295
  • Jan 25, 2011 1:42pm Jan 25, 2011 1:42pm
Justin,

Just to be clear...

Say EurUsd is currently at 1.9000 Bid / 1.9009 Ask. I put in a limit order to go long at 1.9100. Price eventually rises and I get filled. Does that Long trade qualify for the credit?
  • #6,296
  • Jan 25, 2011 1:45pm Jan 25, 2011 1:45pm
Quoting LookDeeper
Hi, Justin.

First of all, kudos, this is a genuinely innovative idea, makes it very clear that you are thinking on the side of your customers, and gives me warm fuzzies about MBTrading as a company I can work with and grow with over time.

I'm a software designer who is in the process of turning into a trader, and I've worked with your API in the past....
LookDeeper-

Glad to hear that you are interested in this new offering. Let me offer some thoughts in response to your questions.

First of all, obviously, this was not something that we jumped into lightly, and we considered the ramifications to our business model. We feel very comfortable with that.

Second, we feel confident that our servers can handle order replacement properly. Just keep in mind that if you keep changing a Limit price, each change is a “new order” in terms of measuring whether you get paid 1.95 per 100,000 or get charged 2.95 per 100,000. If an automated system cancels one limit and goes to replace it with a new price, but in that millisecond, that price is now available in the market, you have sent a marketable order. Our routing system has won awards on the equities side for years, and it is very efficient. Let me give you an example. If the EURUSD is 1.3500 by 1.3501 and you put up a bid at 1.35001 (tenth of a pip over the bid), that makes the quote 1.35001 by 1.35010 (or 0.9 pips). If your order stays there to get filled, you get paid. However, if you cancel the order and let’s say move the buy to 1.35009 in an attempt to put it a tenth of a pip under the ask, and in that time, someone else has already placed a sell order at 1.35008, a couple of things happen. Assuming their order got there first and they were both for the same size, you both will get filled at 1.35008. However, they will receive the 1.95 per 100k credit and you will be charged the 2.95 per 100k fee.

Third, the sixth decimal place will probably eventually come into play.

All of this, we feel, highlights how good our technology is and the fact that we are truly what we have always said. Whereas some brokers try to use the term ECN, they won’t be able to do this. So we feel very comfortable that our servers can handle the increased volume that this will almost certainly bring and that it will play out the way that we want from a business perspective.

In terms of your question, “Why would anyone want to use a market order?” You pretty much answered it yourself. At some point, people need to get out of trades or into them. A stop order is a market order by definition. The server waits for the price that you have selected as a stop and then fires a market order. Trailings stops are market orders. Even a stop limit where the stop is one price and the limit is set just beyond that to control slippage is a “marketable” order which would not qualify for the Pay for Limits scenario. So at the end of the day, at a minimum, one side of a trade must be a market order. The only question is, was the liquidity at the other side (by definition, a Limit) something that came from one of our customers or from a bank. The more trades that we have that are customer-to-customer, the faster and more efficient the flow of executions will be because it is all handled on our ECN and does not need to “route out” to a bank.

Hope that helps.
  • #6,297
  • Jan 25, 2011 1:46pm Jan 25, 2011 1:46pm
Incredible news! Game changer for sure! Here I was about to switch ECNs to save a pittance on commissions, now I stand to make thousands as a predominantly limit-order trader. Thank you MBT!

Justin,

In light of this news, if I could make an urgent feature request for MBT Navigator - a new limit-order type that would allow for CURRENT BID/ASK +/- 0.x pips.

Allow me to explain. Say EUR/USD current bid/ask is 0.8 wide. I'm looking to open long and want to receive the liquidity-add rebate. I enter a buy-limit at 0.1 below the current ask (creating an effective 0.1 spread in the pair). This ensures high odds of getting a fill, while creating an exceptionally low spread for all other participants.

However, given how fast the market moves, I might not get the rebate if the ask has shifted 0.1 lower after the order is submitted (but before it hits your servers).

Thus, the new order type would be a server-side, guaranteed 0.x above or below the current market. (in the above example, the limit order would be entered at 0.1 below the current ask, regardless of where the ask is when the order is submitted).

Do you follow the logic? This would be hugely beneficial, and I'm sure would result in much higher volumes and lower spreads.

I could program this on the API side, but it would be nicer if it was a server-side order routine which guarantees an add-liquidity submission.
  • #6,298
  • Jan 25, 2011 1:51pm Jan 25, 2011 1:51pm
Quoting jleblang
Mdiz2,

Yes, you can see a Market Depth window in our Desktop and Desktop Pro software. MT4 doesn’t have the ability to show this, and it isn’t our software (it’s a Third Party software to us). However, when running an MT4 account, you should also login to Desktop or Desktop Pro because the messaging over there is better and the accounting there is proper versus MT4 which doesn’t do FIFO. Of course, a Market Depth window only displays Limits since there’s no way to “display” a stop as part of the quote.

I am very pleased with today's announcement, but I have to say Justin that the Market Depth in Desktop really SUCKS!!

Although I have solved that problem by switching over t0 NinjaTrader, which has a wonderful price ladder, someone over there at MB must get to work at improving your market depth window in your default software package.

Today's announcement can be a real goose to the liquidity we enjoy, as well as lowering trading costs. Let's not only get half the bang for the buck ( or buck 95) by continuing to have a sub-standard market depth window now that market depth plays an even greater part of trading at MB.
  • #6,299
  • Jan 25, 2011 1:52pm Jan 25, 2011 1:52pm
Quoting Trankuility
Justin,

Just to be clear...

Say EurUsd is currently at 1.9000 Bid / 1.9009 Ask. I put in a limit order to go long at 1.9100. Price eventually rises and I get filled. Does that Long trade qualify for the credit?
Trankuility,

Not sure I get the example, maybe you typed it wrong. If the quote is 1.9000 by 1.9009, if you want to buy no higher than a Limit of 1.9100, you would get filled at 1.9009 immediately. That’s marketable order. But your example says “Price eventually rises and I get filled.” So that makes it sound like what you are saying is that you want a Stop order to buy if the price moves up to 1.9100. If that’s the case, then no, that is not a Limit order, that is a stop order, which means our servers wait until the price rises to 1.9100 and then buy the EURUSD at the market for you.

The example using your original quote of a Limit would be like this. It’s 1.9000 by 1.9009. You want to buy at 1.9005 and you put a Limit in to buy at that price. The quote now goes to 1.9005 by 1.9009, with your Limit being the bid for everyone to see. Someone sends a market sell order through and it hits you. You get filled, and you get paid the 1.95 per 100k credit.

By the way, that would also be if you put the order in to buy at 1.8990 (below the whole quote). Your order is out there for the rest of the market to see if the price drops, and if you get filled, you get paid.

However, if you place a Limit order to buy at 1.9009 or higher, that can be filled right there on the spot at 1.9009, and you are taking liquidity from the market, thus you get charged the 2.95 per 100k routing fee as usual.
  • #6,300
  • Jan 25, 2011 1:57pm Jan 25, 2011 1:57pm
Quoting Crassius
I am very pleased with today's announcement, but I have to say Justin that the Market Depth in Desktop really SUCKS!!

Although I have solved that problem by switching over t0 NinjaTrader, which has a wonderful price ladder, someone over there at MB must get to work at improving your market depth window in your default software package.

Today's announcement can be a real goose to the liquidity we enjoy, as well as lowering trading costs....
i want to demo MB with NT is it possible ?
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