ECN, order execution, aggregators, liquidity. - page 13
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Of course, there are objections. We don't pay anything to the supplier, and we can count as well as you can, believe me. We are an aggregator. We merge suppliers into one cup, and our clients' turnover goes to the supplier who is at the top of the beech. To remove a more expensive supplier from the top of the beech, you need to markup their prices. You do not seem to have understood what was said there.
Another example, closer to the subject. The exchangers.
Two exchangers. One sells dollars at 32.50, the other at 32.60. Both take a 1% commission.
Why do you think that the second exchanger is stealing 10 kopecks from you?
"It's not where everyone is honest that they don't steal, it's where they CANNOT steal."
)))) Are you talking about yourself? ))
Mmda
Yes, I think it would be difficult to explain anything to you.
Let's go back to TVs.
You go to M-video, where the TV costs 10,000 and they give you an additional guarantee (similar to some kind of service, like PAMMs).
Then you go to Media Markt and the TV there costs 9000, but there's no extra guarantee.
Why do you think that M-video is trying to steal a thousand from you? They offered you a price, you can agree or disagree.
Here they had written 10 000, you gave the card to pay it off, and the card was charged 10 500 (slippage), here the question arises as to what this is. A processing fee or theft? You are equating a surcharge with theft.
Show the traders that in your company, even with a strong desire to steal, it is impossible to steal and there will be no need for this talk.
How do you show them?
Write an instruction to show him
You still haven't explained why one supplier is more expensive than another, because in your example there is a problem with summing up two summands. If you count the total payment to the supplier correctly, why would the more expensive one be at the top there?
I explained that we have an aggregator, it mixes flows from suppliers.
Let's go over the counting sticks again:
Two suppliers, one gives Bid-Ask 10-12, the other 9-13. We merge these prices into one tumbler and the client in MT prices 10-12 (our commission is 25).
At the same time, the one that gives prices 10-12 takes a commission of 20 from us, and the one that gives prices 9-13 takes a commission of 10.
As a result, our client sends to buy for 12, goes to the first supplier and we pay a commission of 20, we earn 5. This 5 is not enough to cover the costs of the company and we start working at a loss.
What do we do? We put a markup on the first quote and 10-12 turns into 9-13.
As a result, our client sends to buy for 13, goes to the first supplier and we pay a commission of 20, we earn 5 and earn another 10 on the markup (for a total of 15). If he leaves for the second supplier, we pay a commission of 10, we also earn 15.
All figures are conditional.
In this case we do not deceive the client, we show him quotes 9-13, relevant, on which we are ready to conduct transactions. On the other hand, the spread becomes wider, but we do not conceal it from the Client.
It is always difficult to explain something if there is no logic in this explanation. For the given example, if we reduce everything to one denominator, the price of additional guarantee is also worth some money, i.e. it is quite realistic to calculate the total amount, just like with suppliers.
In our case you can calculate the total amount (as with any other company) by adding up the spread and commission. But if we calculate it correctly, we should also measure slippage statistics and add them to spread and commission.
And how we distribute our surcharge (in commission or spread) is not what the trader cares about. He or she sees the cumulative result and assesses it.
How do I show him?
Write instructions on how to show it
Rann:
Markups are a fair approach. They increase the spread slightly, but that spread is stated and measured. Any trader can analyse the spreads and see if their strategy will work here or not. But artificial slippage is stealing pips. Or when stops only slide into minus, and profits do not slide at all, that is theft.
For some reason you refuse to acknowledge the fact that the trader pays not only the spread, but also the commission. So no one will analyse just the spread, there are no fools like you are probably counting on. And in fact the total payment you have is no less than other "non-truthful" ECNs that use the same providers, but show the trader the total payment. A slippage in the plus may sound tempting, but it is insignificant compared to the huge commission and does not make a difference.
What does it mean to pay the spread? There is an offer price to buy or sell. If you are happy with the price, you make the deal.
You can place a bid yourself and offer to buy or sell. Then your prices will either be accepted or not.
Everything is fair.