Thread: Interbank Spot: quotBank Reversalsquot Make it a Fools Game???

Originally Posted by ;

Out of Company in a week? You mean that the re of bucket stores still stop hunting and quote freezing, banking countless?! Those are something of the past, too! They've just been working for what? 10 years now...?

I am unsure you can compare bucketshop punters to professional traders can you?

Your normal punter probably would not even notice some of the blatant suggestions their bucketshop gets around, let alone complain about it, only read the forums to confirm one

I think Hotspot, Currenex, FXAll, or Lava were Placing trades on a regular basis there would be a little more publicity about it, as Good said no professional would accept this without kicking and screaming.

I've never read the smallprint in an ECN's agreement but I'd imagine there should be something in there to protect all parties.

Banks providing liquidity to ecn's for example cnx may and will amend trades. This happens more often than you believe but it is going to only impact you if you trading style increases to the situations where this action can arise. As you probably know, every 'trade' has it's own algorithm for processing orders and when they are received depending on a number of variables, namely order dimensions, order type, time received and of course price. Sending an order with precisely the same kind and dimensions to liffe and cme is going to result in differing matches even if all other conditions are identical.

Though I exchange mainly through cnx, I have been trading on liffe and eurex for any number of years and haven't had a commerce busted. Euribor strip moved and when they pulled on schatz year bid to fuck. However, cnx is completly different since it is not a complete order matching system as can bee seen by alternative spreads. Banks submitting bids and offers on the machine won't have orders fulfilled by other banks doing exactly the same. If this is the case since it's in stocks, you'd never see a disperse lower than the minimum tick size. I cant say for sure, but I presume that due to the difference, their order processing logic should account for this fact and that is where the problems start to emerge.

There's yet another major problem when cnx in that the liquidity providers have a last look option. Now, I for one have not noticed any of this happening and I often exchange in particularly volatile conditions. It is there but will result in an order not being satisfied than a commerce that is busted.

Going back to busted trades, it has to be noted that I used the term amended at the start of the post since it is generally what tends to be done, and just when you've had a load off mkt. Say that the you purchased eur$ in 1.5233 and also the bank believes that the mkt was actually at 1.5240/41, they'll amended your trade up. As to exactly what price, that is up to the bank and unless you are churning out commisiions to your broker, they are unlikley to argue your case from a bank. This said, if you exchange when it is volatile, you need to udnerstand what you are getting into. I dont want to hear any coments concerning trading futures becasue if it is volatile, you'll receive poor fills in stocks unless you are investing 1 lots, in which case you are just a part-timer. The main thing to consider from that ... is that if the banks do amend you are trades, that is exaclty what they'll do, i.e. you'll find out another day which you have an open position becuase they reversed or busted your own trade.

Another factor you want to be worried about cnx is that the information feed is split into 2, price and transaction. This is quite likely for load balancing reasons on the cnx servers, but what this means is that the price you hit might not necessarily be an executable price.

Despite it's failings, I do most of my trades on cnx never use futures fx.

Sccz97: it seems that some currenex-providers do indeed 'bust' trades (in this case ODL), see:

https://www.forexforum.co.za/general...ales-time.html

I suppose the lesson in all of this is be sure you're in before or after the real news release not throughout the launch!

Originally Posted by ;

: it seems that at least some currenex-providers do indeed 'bust' transactions (in this instance ODL), see:

https://www.forexforum.co.za/cryptoc...oints-mt4.html

cnx and your broker can treat orders diff if they come from other traders. As I mentioned cnx has a last look facility for those banks providing liquidity. In this case the individual opted to exchange a cross with little liquidity around a period when important economic data was to be published. Even if ther quote was 75/87 and you also trid paying to 90, if all of the supplies up to this price are banks and they decide not to fill you, then your order will be abandoned pending. The op of the thread was foolish/naive enough to use a market order roudn news and then lifted the next available offer that was posted by either a bank or a different trader.

Originally Posted by ;

I guess the lesson in all this is be certain you're in before or after the actual news release not during the discharge!

I think the key lesson Isn't to exchange news unless you understand what You're doing, and when anything goes wrong, dont complain

Originally Posted by ;

Banks submitting bids and offers on the system will not have orders fulfilled by other banks doing the same.

That's interesting, why is that? Can it be an unwritten agreement between them or just not practically possible? I thought banks use different banks for liquidity and also to offset risk.

The interbank is a different world and also a mystery to me but it is intriguing to find out more about it from people who know.

Originally Posted by ;

Say that the you purchased eur$ in 1.5233 along with the bank believes the mkt was really at 1.5240/41, they will amended up your trade.

That makes much more sense and is exactly what I have experienced on the rare occasions my bucketshop has adjusted a commerce. Putting a trader back in a trade that he thought was already closed can lead to all sorts of difficulties, though some shops do it and get away with it!

sccz97: do they amend fills on limit-orders too? That would totally defeat the point of a limit-order (being stuffed only at or better of price X).

Using retail-level ECNs (hotspot and IB a long time ago) I got a commerce canceled or amended (althou I only ever use limit orders and dont commerce on spikes). Perhaps thats because im beneath their radar with sizes no bigger than 1 mio.

Originally Posted by ;

: do they amend fills on limit-orders too? That would completely defeat the point of a limit-order (being stuffed only at or greater of price X).

Utilizing retail-level ECNs (hotspot and IB quite a while ago) I never got a commerce canceled or amended (althou I only ever use limit orders and dont commerce spikes). Maybe thats because im beneath their radar with dimensions no larger than 1 mio.

That is the one thing which bothers me about cnx. By default, the logic which cnx uses to ascertain which bid.offer to match against your order (assuming that the order is currently at the front of the q) is the best price available for your order. Therefore, if you ship a lmt order to buy $ at48 when the offer is46 to eur, you will get filled at 46.

Issues arrise when one of the liquidity providers is either especially slow in updating prices or actually has a issue with it's pricing engine and whiel that the mkt for eur$ is 45/46, it's posting supplies of 25. As I mentioned earlier, the bids/offers in the banks aren't matched against each other which is the reason why you might see this in your own platform as 45/25. Any buy limit order at this point you send using a price gt;= 25 will get filled (based on the volume in the remainder of the publiion). Rightly so the bank will find the broker to amend the trade back to the suitable price but the issue is that the bank may be sneaky and amend it to state 47 or greater rather than 46.

Lesson heard is ... always hae a backup platform in case your main platform goes, goes for your internet connection

Apparently if your broker is great and that he likes you, then he will call you up and discuss issue with you BEFORE minding your transaction in your machine and leaving you open position.

He then will generally offer you 2 choices:

1) Come up to your price difference between what you paid and what counterparty thinks you should have paid
2) Hurry commerce and leave you with open position

you are able to decide.