Explain the mechanism. If I opened on one market maker, how can I now close on another market maker? - page 4
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What kind of idiots would buy an option for a lakh at such a turnover? I am sure there is a critical mass ONLY after which you can start taking clients' trades to a real exchange by means of an aggregate lot. It is measured more like an internal volume turnover. This determines the volume of hedged positions. Until the critical mass is reached, you try to bring them together, after that they are hedged on the real exchange. I think many brokerage companies that failed failed to overcome this barrier. The market may be divided into two or more branches. But after the daily turnover with exchanger funds. It's just you talk about brokerage companies and cite the example of $100. Sorry, but I do not know any brokerage company with such small funds.
One more time - 10-50-100-200 dollars is the average order of a regular DC customer.
The DC has concentrated a lot of positions and hedged them by buying an option.
What do you do when clients begin to STILL CLOSE THEIR ORDERS?
Hold an option, recouping traders' positions from reserves and ACCEPTING THE RISKS?
What kind of an idiot would buy an option at this turnover? I am sure there is a critical mass ONLY after which one can start taking clients' trades to the real exchange by means of an aggregate lot. It is measured more like an internal volume turnover. It determines the volume of hedged positions. Until the critical mass is reached, you try to bring them together, after that they are hedged on the real exchange. I think many brokerage companies that failed failed to overcome this barrier. The market may be divided into two or more branches. But after the daily turnover with exchanger funds. It's just you talk about brokerage companies and cite the example of $100. Sorry, but I do not know any brokerage company with such small funds.
don't fill your head with any critical masses, barriers and your own thoughts - what should DC do as positions close?
don't fill your head with any critical masses, barriers and your own thoughts - what should DC do as positions close?
He pairs you up with another one of his clients, or sells you a part of his stock option conditionally. Although he may have bought it on an exchange of large volumes internally, he can break it up and sell it off in portions until he sells it off completely. Questions?
1. Four times already explained that options and futures are standardised exchange-traded instruments - a standard contract size. They cannot be fractured.
2. The DC can overlap inside the kitchen, but in that case that client's share inside the option becomes the risk taken by the DC. And as the other clients' positions are closed, the risk of the DoC will increase. There is no hedging.
The only way to hedge the VC risk is to put the position on the Interbank through a liquidity provider, but it only works for one large position. You cannot hedge a consolidated position of many small clients - you just use your own capital to hedge it.
In fact, the market maker has already done everything he was required to do on the first leverage trade - he provided liquidity and resold the result to the next one just as quickly.
But the "betting" you have already made with a broker at a spread no smaller than the market maker's.
Therefore, "to close with leverage on another market maker" is a rather strange phrase. He doesn't know you and the train has already left
Who's next?
the broker forwards the trades to the market maker. and the market maker provides a leverage of 100.
In essence, the broker simply redirects all the trades to a higher firm.
So I open on this market maker with leverage of 100. If the price goes up - I am in profit, if the price goes down - I am in loss.
Then, when the price rose by 10 pips, I closed at the same market maker. We liquidated between us, I gained 10 pips and he lost 10 pips.
but!
if my broker found another market maker at a better price, how would my trade be closed?
In general, the market maker has already done all that was required of him on the first leverage - he provided liquidity and resold the result to the next one just as quickly.
I get it. you mean the next trader.
But you described an ideal situation where the maker has as many buyers as sellers.
But sometimes, 90% of eurodollar traders are on the buy side.
Then, the market maker holds a buy position with leverage.
How can it be closed by another market maker?
something is wrong here.... brokers tripping....
But the "betting" you have already made with a broker at a spread no smaller than the market maker's.
The broker is not involved in the trades at all, he transfers everything upwards to the supplier.
What do you mean?
Who's next?
A broker, on the other hand, transfers the trades to a market maker and the market maker provides 100 leverage.
Basically, the broker just forwards all the trades to a higher office.
So I open on this market maker with leverage of 100. If the price goes up - I am in profit, if the price goes down - I am in loss.
Then, when the price rose by 10 pips, I closed on the same market maker. We liquidated the position between us, I gained 10 pips, he lost 10 pips.
but!
if I find another market maker at closing time, with a better price, how will my deal be closed then?
First of all, decide which broker we are talking about. A stockbroker or a forex broker? A stockbroker is simply an intermediary between the client and the exchange. A Forex broker is mostly a front office that covers your small transactions within his office.
You must first define which broker we are talking about. A stockbroker or a forex broker? A stockbroker is simply an intermediary between the client and the exchange. A Forex broker is basically a front office that covers your small trades inside their office.
I think it's clear from your posts that you're talking about forex.
But for some reason you talk as if you were trading on a stock exchange. In forex, your small trades are inside the brokerage house. And you insist on talking about the market maker. Google market maker and its functions.
But for some reason you talk as if you were trading on a stock exchange. In forex, your small trades are inside the brokerage house. And you insist on talking about the market maker. Google market maker and its functions.