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LMAX = revolution?!?

  • #1,441
  • Nov 7, 2012 11:29am Nov 7, 2012 11:29am
Any one got LMAX to give discounts on the commission rates? How many contracts do you need to trade per month before they give discounted rate?
We're all stories in the end. Just try to make it a good one.
  • #1,442
  • Nov 7, 2012 2:44pm Nov 7, 2012 2:44pm
Quoting BennyB
I think the grid starts from 500mm per month. This will give you a few points off 25 per million. At Armada you get 20 per million from day 1. You could also go with Fastbrokers as they also offer LMAX.

I'll check with their support desk and post the answer here.
We're all stories in the end. Just try to make it a good one.
  • #1,443
  • Nov 12, 2012 3:58am Nov 12, 2012 3:58am
There is a new article about LMax on EuroMoney. Its quite an interesting read.
http://www.euromoneyfxnews.com/Artic...a-new-era.html
(trail account required)
  • #1,444
  • Nov 12, 2012 9:36am Nov 12, 2012 9:36am
Hi all,

Sorry in advance if it's been answered already before, but can any live customer share their experience regarding withdrawing of funds (both deposits and trading profits). Not being negative, but I am new to lmax and it looks promising, just want to be sure.

Thanks,

pb
  • #1,445
  • Nov 13, 2012 4:55am Nov 13, 2012 4:55am
Quoting pbb
Hi all,

Sorry in advance if it's been answered already before, but can any live customer share their experience regarding withdrawing of funds (both deposits and trading profits). Not being negative, but I am new to lmax and it looks promising, just want to be sure.

Thanks,

pb
We've been using them for more than 6 months now, withdrew money and trading profits - not a problem.

Actually, quite a lot of confusion regarding LMAX: it is not a dealer, nor is it an ECN - it is licensed by the FSA to operate a Multi-lateral Trading Facility (MTF), which is a regulatory figure introduced by MiFID that sets down rules similar to the ones that organised exchanges must apply.

This means:
- Segregated accounts - your money is NEVER mixed with theirs
- Neutral execution - whoever takes the other side of your trade does not know who you are (which means they can't market make against you)
- Same price for everybody - i.e. there is a market price that results from matching the depth of the order book

In other words, an MTF is the ONLY type of broker type guaranteed NOT to be a scam by the FSA.

ECNs (let alone market makers) are in a completely different dimension, and it's actually not an apples to apples comparison
  • #1,446
  • Nov 13, 2012 11:00am Nov 13, 2012 11:00am
Since LMAX is regulated in the UK, how much of my money is protected by the FSA ?
  • #1,447
  • Nov 13, 2012 1:08pm Nov 13, 2012 1:08pm
Quoting Forexeurusd
Since LMAX is regulated in the UK, how much of my money is protected by the FSA ?
I know FSA will immediately return £75k on regulated bank deposit accounts in case the bank goes under.
  • #1,448
  • Nov 13, 2012 1:12pm Nov 13, 2012 1:12pm
Quoting TS Owl
We've been using them for more than 6 months now, withdrew money and trading profits - not a problem.

Actually, quite a lot of confusion regarding LMAX: it is not a dealer, nor is it an ECN - it is licensed by the FSA to operate a Multi-lateral Trading Facility (MTF), which is a regulatory figure introduced by MiFID that sets down rules similar to the ones that organised exchanges must apply.

This means:
- Segregated accounts - your money is NEVER mixed with theirs
- Neutral execution - whoever takes the other side of your trade does not...
Yes you are spot on there with the MTF vs ECN.
  • #1,449
  • Nov 13, 2012 1:34pm Nov 13, 2012 1:34pm
Quoting Ultimate6
I know FSA will immediately return £75k on regulated bank deposit accounts in case the bank goes under.
For investments the limit is GBP 50K - and it it will not be immediate. It will take a few months minimum. For example, the Worldspreads bankruptcy occured in March, clients got compensation in September. And its not payed out by the FSA, but by the FSCS.

LMax is a subsidiary of Betfair - i doubt they will go under anytime soon. But the 50K guarantee is still good to have.
  • #1,450
  • Nov 13, 2012 2:13pm Nov 13, 2012 2:13pm
Quoting TS Owl
We've been using them for more than 6 months now, withdrew money and trading profits - not a problem.

Actually, quite a lot of confusion regarding LMAX: it is not a dealer, nor is it an ECN - it is licensed by the FSA to operate a Multi-lateral Trading Facility (MTF), which is a regulatory figure introduced by MiFID that sets down rules similar to the ones that organised exchanges must apply.

This means:
- Segregated accounts - your money is NEVER mixed with theirs
- Neutral execution - whoever takes the other side of your trade does not...
Not attacking you or LMAX here, but the comments on MTFs vs ECNs is very misleading. I don't blame you though, since the huge marketing engine that is retail forex has really messed up terminology and it leads traders to think all sorts of odd things.

Under MiFID, if you want to run an ECN (note: I said run, not trade/clear through, but actually run the trade venue) then you have to register as an MTF since that the 1 of 3 different classifications you'd fall under (the others being RMs and SIs.) There isn't a classification of "ECN", since that falls under MTF.

A good example would be Chi-X. They run equity (stock) ECNs all over the world, using pretty much the same matching engines and order rules in each location. I use them extensively here in Canada, where they are referred to as an ECN... but if I use Chi-X Europe, it's called an MTF.

MTF's aren't even restricted to the same boilerplate of structure between them in Europe, they can apply their own rules, order matching setup, heck, they can even operate as a dark pool and not display liquidity to most classes of participants. They have nearly all the options and structures at their disposal as an ECN.

Oh, and your point about segregated accounts is really done on the broker level with the FSA, not the MTF level with MiFID. LMAX is a broker first (all client facing activity is done as a broker who routes orders to their own MTF, but the MTF is a separate business unit.)

Lastly, half the problem isn't even about defining MTFs vs ECNs, it's that the term ECN is being abused by retail forex brokers, and their marketing teams, so many traders have little idea of what's what. Too many brokers are calling themselves "ECNs" when all they do is route orders to an electronic network. Most ECN brokers are really just "ECN-like" in execution and quotes. And finally we get the shit birds of the ECN brokers who love calling themselves "True" or "Pure" ECNs while actively putting down other ECN-like brokers in their marketing material, yet these "True/Pure" ECN brokers are only ECN-like themselves. It's a complete mess... and it's all designed to get your retail business by following the latest trading trend.

Same thing happened to market makers years ago, when brokers started going "STP" and flaming the older market maker style.

Probably the same thing will happen to MTFs if the term ever takes off (LMAX would have to start showing a lot of success to attract other brokers to toss some marketing spin on "MTFs", either by calling it their own or putting it down.)

Quoting TS Owl
In other words, an MTF is the ONLY type of broker type guaranteed NOT to be a scam by the FSA.

ECNs (let alone market makers) are in a completely different dimension, and it's actually not an apples to apples comparison

Second to last line there concerns me. There is no guarantee for anything, ever, when trading. Repeat that 10x in your head right now.

However, from what I can tell a retail trader shouldn't be too concerned with LMAX in the UK given the FSA regulation, protection, and such.. none of this post was about putting LMAX down after all.. I just get buggered up over the terminology misuse.

And of course, the point of all this is that ECNs and MTFs are comparing apples to apples, once you sort out what terminology you're using to define both and look up the MiFID classification of MTFs.
FXGears.com
  • #1,451
  • Nov 13, 2012 2:31pm Nov 13, 2012 2:31pm
Quoting Jack_Larkin

.......And of course, the point of all this is that ECNs and MTFs are comparing apples to apples, once you sort out what terminology you're using to define both and look up the MiFID classification of MTFs.

Great explanation. Thanks Jack.
  • #1,452
  • Nov 13, 2012 2:51pm Nov 13, 2012 2:51pm
Jack: Agreed on the usage of the term "ECN".

But you do not need to form an MTF if you want to run a ECN (or whatever you want to call it) in Europe. There are plenty of OTC executing venues in Europe that do not have this status. Not entirely sure why they did it. Probably for marketing reasons, or maybe to stay ahead of the regulatory curve.

I don't agree that its just a marketing buzzword. Its true that different MTFs can have different matching algorithms. I think the biggest difference is that there needs to be a public rulebook where they detail how the system works, and they need to stick to that - so there will be no speculation about what acutally happens. More that can be said for most ECNs. For example, if you look at the Dukascopy diagramm that should explain how their system works, it raises more questions that it has answers. Or, for example, Currenex, it can apparently be configured in various ways, depending on your provider, what you ultimately get can vary.

Also, a mtf expensive to establish and maintain. It took them 2.5 years to get FSA to sign off on this. I doubt it will be the next marketing thing to do, just for that reason.

In FX, they are the first to go through the trouble and aquire such a license - i mean, you gotta give them that. Of course they try to sell it on this too. Did you read the article i linked above? There is some interesting discussion about this in there.
  • #1,453
  • Nov 13, 2012 5:48pm Nov 13, 2012 5:48pm
Quoting TS Owl
We've been using them for more than 6 months now, withdrew money and trading profits - not a problem.

Actually, quite a lot of confusion regarding LMAX: it is not a dealer, nor is it an ECN - it is licensed by the FSA to operate a Multi-lateral Trading Facility (MTF), which is a regulatory figure introduced by MiFID that sets down rules similar to the ones that organised exchanges must apply.

This means:
- Segregated accounts - your money is NEVER mixed with theirs
- Neutral execution - whoever takes the other side of your trade does not...
Thanks for that!
  • #1,454
  • Nov 13, 2012 6:55pm Nov 13, 2012 6:55pm
Quoting shrike
Jack: Agreed on the usage of the term "ECN".

But you do not need to form an MTF if you want to run a ECN (or whatever you want to call it) in Europe. There are plenty of OTC executing venues in Europe that do not have this status. Not entirely sure why they did it. Probably for marketing reasons, or maybe to stay ahead of the regulatory curve.

I don't agree that its just a marketing buzzword. Its true that different MTFs can have different matching algorithms. I think the biggest difference is that there needs to be a public rulebook where...
Hi shrike,

would you kindly paste the article here. i'm having trouble registering the trial.

Thanks
Be the market
  • #1,455
  • Nov 14, 2012 2:45am Nov 14, 2012 2:45am
Quoting Jack_Larkin
Not attacking you or LMAX here, but the comments on MTFs vs ECNs is very misleading. I don't blame you though, since the huge marketing engine that is retail forex has really messed up terminology and it leads traders to think all sorts of odd things.

Under MiFID, if you want to run an ECN (note: I said run, not trade/clear through, but actually run the trade venue) then you have to register as an MTF since that the 1 of 3 different classifications you'd fall under (the others being RMs and SIs.) There isn't a classification of "ECN", since...
Hat tip Jack - always great to learn something new, and great to see there are honest & knowledgeable people out there
  • #1,456
  • Nov 14, 2012 3:23am Nov 14, 2012 3:23am
Quoting TS Owl
Hat tip Jack - always great to learn something new, and great to see there are honest & knowledgeable people out there
Thanks for that Jack.
  • #1,457
  • Nov 14, 2012 4:24am Nov 14, 2012 4:24am
Quoting shrike
Jack: Agreed on the usage of the term "ECN".

But you do not need to form an MTF if you want to run a ECN (or whatever you want to call it) in Europe. There are plenty of OTC executing venues in Europe that do not have this status. Not entirely sure why they did it. Probably for marketing reasons, or maybe to stay ahead of the regulatory curve.

I don't agree that its just a marketing buzzword. Its true that different MTFs can have different matching algorithms. I think the biggest difference is that there needs to be a public rulebook where...
Fully agree with you Shrike: holding an MTF license requires you to have the technical infrastructure (and legal permission) to match orders between the participants according to a rulebook approved by the regulator. There are different matching algorithms, and small variations on rules but the point about the MTF (I think) is that all participants have equal rights in accessing the BEST price feed / market depth that results from the matching algorithm (which is in turned governed by the rulebook).

An ECN can CHOOSE to offer the best price that results from matching their various liquidity providers, or maybe not. Which opens the way to offering different prices to different customers - something that will NOT qualify as an MTF. In other words:
- MTF: Rulebook guarantees access to best resulting price (obviously different users pay different commissions on different volumes but everybody trades on the same price)
- ECN: Your commercial relationship with ECN & your technical infrastructure drives how close you get access to their best price best. But unlike with the MTF, there's no rulebook validated by the regulator that describes the process

I.e. great post Jack, but I side with shrike that it's more than marketing. At least to me - that's why I chose them :-)
  • #1,458
  • Nov 14, 2012 4:36am Nov 14, 2012 4:36am
Quoting alvseek
Hi shrike,

would you kindly paste the article here. i'm having trouble registering the trial.

Thanks
Try that: http://pastebin.com/vnkrvXV6
  • #1,459
  • Edited 6:03am Nov 14, 2012 5:50am | Edited 6:03am
Quoting TS Owl
Fully agree with you Shrike: holding an MTF license requires you to have the technical infrastructure (and legal permission) to match orders between the participants according to a rulebook approved by the regulator. There are different matching algorithms, and small variations on rules but the point about the MTF (I think) is that all participants have equal rights in accessing the BEST price feed / market depth that results from the matching algorithm (which is in turned governed by the rulebook).

An ECN can CHOOSE to offer the best price that...

Right, LMAX is a LEVEL playing field , forex ECN's are NOT
  • #1,460
  • Nov 14, 2012 6:24am Nov 14, 2012 6:24am
Quoting Forexeurusd
Right, LMAX is a LEVEL playing field , forex ECN's are NOT
I wouldn't say that. LMax could do what they do now without an MTF license and call them self an ecn. Just because a firm doesn't have such a license doesn't mean they are automatically unfair. I like their additional commitment/disclosure of a rulebook, but they are certainly not the only viable broker out there.
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