pricing - page 4
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Yeah, you know, they are so naive to have one supplier and filter deals with small volumes.
If you have to speculate, there are two options: join the government or at least become a terrorist... Sell a quid and go somewhere else.
P.s. Why don't you quit that nonsense ... You're saying the same thing and stick to tactics, you'll get a lot of stress.
You can tell Reuters and the like to fuck off - they're rubbish. Here's how things are when it comes to pricing:
There are several interbank systems such as EBS, Currenex, HotSpotFXi, ... working via FIX API.
Each system has a number of liquidity providers connected to it. The liquidity providers are usually banks.
Each bank always offers a certain exchange rate and indicates the volume that corresponds to that rate.
The interbank systems in which these banks participate aggregate their exchange rate bids into one publicly available cup.
Accordingly, the best prices and corresponding volumes can be seen from the cup. This forms the spread, which is derived from the cup.
Since liquidity is limited to the bids that banks make, the spread in the interbank system grows as its corresponding volume increases.
All participants in the interbank system see the same cup, the ECN.
In addition to liquidity providers, the participants of the interbank system are also various speculators. From large hedge funds to individuals. All of them can speculatively put their own bids into the betting market, in other words limit orders, but only with margin. In other words, they will not put a big limit order.
In some interbank systems trades are anonymous, i.e. you cannot tell from whom you bought and sold, also on the reverse side. In some, it is not anonymous.
The same liquidity providers can be part of several interbank systems. Hence, the liquidity (EBS + Currenex + HotSpotFXi) is less than the liquidity of each system.
Just here we can talk about so-called integrators, like Dukascopy, which are not ECNs, but which can (not exactly) take into account the total liquidity of the different interbank systems in order to increase liquidity and the best prices. Integrators, as a rule, do not make bids in the market pool, but wait for the current price on one of their connected interbank systems to reach the desired level. Then a market request is made there. This means that the limit order placed by the integrator's client will be executed as a market order in one of the interbank systems. Hence sometimes they do not execute limit orders.
Integrators, as well as other non-ECN-systems, because of their technology can sometimes deceive their clients. Although, honestly speaking, ECN-systems can do it technically. But then again, can does not mean that they do.
There are automated arbitrage systems in the interbank market which monitor price discrepancies between different interbank systems in order to capitalise on them. So arbitrage happens by the millisecond. It is possible to get ahead of these automatic arbitrage systems, but it is far from easy. Even factors such as the speed of the connection and the proximity of the server with the system to the Execution server of the interbank system play an important role here.
Further:
Every interbank system charges a commission to participants. A trader can enter the interbank system through a broker or through a bank in the broader sense of the word. In the first case he sends money to the broker, in the second he sends money to the bank. Precisely because banks have traders to whom the bank provides (but not always) access to the interbank system connected to it, the bank's buy and sell offers jump on the interbank system, since all of the bank's traders on the interbank system act in the same name - the name of their bank. Also, the bank has big clients (corporations), which need to exchange certain amounts of currencies between themselves without a speculative component, but still better. Therefore, the bank adjusts its price and volume offerings based on the needs of its large clients.
Banks do not take risks during the news, so their risk managers reduce volumes during news releases. Each big bank has its own completely closed pricing system, which takes into account the needs of its big clients, the situation on the connected interbank systems and the opinion of its risk managers, who also do analysis of other markets.
Also, the participants of the interbank systems do not shine their entire liquids on the cup, they put their bids out in portions so that others cannot take into account strong bids and use this for speculative purposes.
Yeah, you know, they are so naive to have one supplier and filter deals with small volumes.
If you have to speculate, there are two options: join the government or at least become a terrorist... Sell a quid and go somewhere else.
P.s. I'd rather stop this nonsense... You're saying the same old shit and stick to tactics, you'll get a lot of nerve damage.
Ok the last question why do different DTs have the same quotes, do they change synchronously? I can only explain it by the fact that they take the information from a single network system!
Then don't shout on the forum why the cotiers are mixed up...
>> then don't shout on the forum why the quotes are mixed up...
You don't have to yell, you just have to arbitrate!
I still have to digest it somehow. Is there any literature on this subject? Who knows, could you please tell me?
I have to digest it somehow. Is there any sensible literature on the subject? >> who knows, please?
I haven't read any books about forex and pricing. All from personal experience as a trader, starting from the very bottom.
I have to digest it somehow. Is there any sensible literature on the subject? >> who knows, please?
Banking and Money and Credit Policy, last chapters... >> about the head start in crates.
You don't have to yell, you have to arbitrate quietly.
Look... you can finish the job...
If it was that easy, I'd be arbitrating right now.