Now we know who the market makers are... | Forex Factory

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Now we know who the market makers are...

  • #1
  • First Post: Jan 16, 2015 11:13am Jan 16, 2015 11:13am
After what happened to CHF, some brokers are going bust while others are somehow magically untouched. I have posted a link to a website which has compiled the news releases related to their health level below:

http://www.forexcrunch.com/snbomb-re...forex-brokers/

So from my analysis, those who survived are definately market makers, because when their clients got margin called, the broker themselves end up being the winner as it's all performed in their own backyard market. While for cases like Alpari, they have the "Pro" accounts (the true ECN ones) and the normal accounts (the market maker ones). So I'm speculating that Alpari ended up in the red because their "Pro" accounts had too much losses, so big, that winnings from their market making accounts could not cover up their losses that have to be paid up to their liquidity providers.

In the same breath, I'm tempted to conclude that brokers like ICMarkets who claim they're a true ECN broker, actually is just another market maker.

I might be wrong, so any thoughts from the experts here?
Detach yourself from the value of money - Mr. Pip
  • #2
  • Jan 16, 2015 11:16am Jan 16, 2015 11:16am
Quoting Supreme1394
After what happened to CHF, some brokers are going bust while others are somehow magically untouched. I have posted a link to a website which has compiled the news releases related to their health level below: http://www.forexcrunch.com/snbomb-re...forex-brokers/ So from my analysis, those who survived are definately market makers, because when their clients got margin called, the broker themselves end up being the winner as it's all performed in their own backyard market. While for cases like Alpari, they have the "Pro"...

Well spotted, those that are not affected by yesterday are Market Makers, there is no way a true ECN wouldn't haven gotten their @rse handed to them on a plate yesterday.
A contrarian; I always disagree.
  • #3
  • Jan 16, 2015 11:25am Jan 16, 2015 11:25am
Thats correct. Only bucketshops MM can scape from an event of this magnitude.

Their trades are offset internally and they only go outside for liquidity in rare cases.

those rare cases are when too many customers are in the right side of the market.

I bet they made a KILLING yesterday.

I also bet they are claiming false losses.

Thousands of accounts got transferred to the MM via margin calls.

And I bet most of TP got a " not filled" tag on it.

It is like free money!!
So, you think you have rights? LOL
  • #4
  • Jan 16, 2015 12:07pm Jan 16, 2015 12:07pm
Quoting Supreme1394
After what happened to CHF, some brokers are going bust while others are somehow magically untouched. I have posted a link to a website which has compiled the news releases related to their health level below: http://www.forexcrunch.com/snbomb-re...forex-brokers/ So from my analysis, those who survived are definately market makers, because when their clients got margin called, the broker themselves end up being the winner as it's all performed in their own backyard market. While for cases like Alpari, they have the "Pro" accounts (the...
You never know some brokers might be downplaying their losses in order to calm their clients; it's like banks trying to stop bank runs. If all of us traders all started to withdraw funds from them, it would make matters even worse than what actually is. And some might have been ok really because 1) they are well-capitalized like IB; they lost $120 million due to negative balances but it only represented 2.7% of their total capital and 2) their losses from their ECN were really offset by their MM side which is very plausible probably like IC Markets and Gain Capital which I really don't care as long as their MM side of business is completely segregated from their ECN side and they are not taking the other side of clients' trades on their ECN side.

But the real culprit in causing this turmoil is REALLY the liquidity providers like Deutsche who were supposed to be there providing liquidity and making market but all bailed out on us and causing a completely disrupted market. See my thread: http://www.forexfactory.com/showthread.php?t=522071
Make your losses in demo. Earn your profits live.
  • #5
  • Jan 16, 2015 1:00pm Jan 16, 2015 1:00pm
IC Markets is still in the process of adjusting wrongful client margin calls and reinstating accounts.

Until further notice, nothing can be concluded about them.
  • #6
  • Last Post: Jan 16, 2015 2:06pm Jan 16, 2015 2:06pm
Dukascopy have said on their website that they made it without a scratch because they'd reduced leverage for EURCHF to 1:10

Quoting Forexia
{quote} You never know some brokers might be downplaying their losses in order to calm their clients; it's like banks trying to stop bank runs. If all of us traders all started to withdraw funds from them, it would make matters even worse than what actually is. 1) they are well-capitalized like IB; they lost $120 million due to negative balances but it only represented 2.7% of their total capital and
You are probably right that some of the ECNs might be downplaying their losses.

I think forex isn't the biggest part of IB's overall business, they have spread themselves out over several markets so I guess that's the reason it wouldn't be a big deal for them.
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