Question for prop firm stir traders

[tripleogstar]

lol ridiculous. OF COURSE EXCHANGE FEES WILL OUTWEIGH REBATES. The whole point of a rebate is to reduce trading fees on the exchange since you are providing liquidity in the market. FURTHERMORE, THE ONLY WAY REBATES ARE GOING TO BE SIGNIFICANT IS IF YOU ARE MASS QUOTING THE MARKET. Even then, it is IMPOSSIBLE for rebates to be greater than trading fees. That means that exchanges are paying market makers to trade via the exchange, but then your forgetting about a little thing called PROFIT. I can not believe how dumb some people are

 

[tripleogstar]

buy the bid, sell the offer! end of the month your rebates are gonna be massive. As said before it is a boring strategy!

lol you mean, lift the offer hit the bid. You can't buy the bid doesn't make sense. Market makers, make a bid and offer in the market.

 

[cyrustajik]

so all the liquidity schemes and market making systems are for stupid people?!

PLEASE PLEASE PLEASE stay away from this sort of business.

 

[tripleogstar]

so all the liquidity schemes and market making systems are for stupid people?!

PLEASE PLEASE PLEASE stay away from this sort of business.

that doesnt make any sense dude. and has no link to what i said. I AM SAYING THAT EXCHANGES MAKE MONEY BY CHARGING PEOPLE FOR DOING TRADES WITH THEM, THEY GIVE REBATES TO TRADERS WHO PROVIDE LIQUIDITY (I.E MARKET MAKERS), BUT IT IS NONSENSICAL FOR THE EXCHANGE TO GIVE AWAY MORE IN REBATES THAN IT RECEIVES IN EXCHANGE FEES. HENCE WE COME TO THE LOGICAL CONCLUSION THAT THE EXCHANGE FEES CHARGED TO TRADERS WILL EXCEED THE REBATE THE TRADER RECEIVES. Otherwise the exchange will make no money.

 

[arabianights]

that doesnt make any sense dude. and has no link to what i said. I AM SAYING THAT EXCHANGES MAKE MONEY BY CHARGING PEOPLE FOR DOING TRADES WITH THEM, THEY GIVE REBATES TO TRADERS WHO PROVIDE LIQUIDITY (I.E MARKET MAKERS), BUT IT IS NONSENSICAL FOR THE EXCHANGE TO GIVE AWAY MORE IN REBATES THAN IT RECEIVES IN EXCHANGE FEES. HENCE WE COME TO THE LOGICAL CONCLUSION THAT THE EXCHANGE FEES CHARGED TO TRADERS WILL EXCEED THE REBATE THE TRADER RECEIVES. Otherwise the exchange will make no money.

Only if it gives the rebates to most traders

Also, I don't think what you are saying is right for all exchanges, actually. However, in the STIR world it is.

That said in this case you're right, you can't live just off rebates and scratching, you do have to have some edge (otherwise you'd just have two people sitting next to each other crossing all day long and becoming billionaires) But your edge can be tiny enough that you make almost all of your profit from the rebates... or in fact without rebates you would be at a loss with exchange fees included, which I think is what cyrus is trying to say. Especially applies past the red months.

LIFFE are offering a free million sides on STIR options to new entrants for the next few months btw.

 

[cyrustajik]

Only if it gives the rebates to most traders

Also, I don't think what you are saying is right for all exchanges, actually. However, in the STIR world it is.

That said in this case you're right, you can't live just off rebates and scratching, you do have to have some edge (otherwise you'd just have two people sitting next to each other crossing all day long and becoming billionaires) But your edge can be tiny enough that you make almost all of your profit from the rebates... or in fact without rebates you would be at a loss with exchange fees included, which I think is what cyrus is trying to say. Especially applies past the red months.

LIFFE are offering a free million sides on STIR options to new entrants for the next few months btw.

good post mate. Thanks for the Liffe info as well. should start getting some limits for STIRS soon and enjoy this nice scheme.

 

[marcusant]

I dont think i was completely clear by what i meant when i said scratching.
What I meant to say was covering roundturn costs but not making any P&L for the day.
so 1000 Rt's with £1000 would be a scratch on the day, assuming its £1 a rt.

 

[stir-trader]

In very few cases there are 100% rebates, but they do exist. The problem with the living off your rebates is that it is very hard to do the volume that we used to do. Just over a year ago we were hitting more than a million euribor lots a month and we saw significant rebates, now we dont. The industry has changed and a different style of trading has come to the forefront. Volume is down as organisations have become more risk concious. Every good trader that i know has only ever viewed rebates as a bonus. Trading for your rebate stacks the odds against you as you only need a couple of bad trades to sink your p&l. If you can hit significant rebate levels then that implies that you are a good trader and in that case your focus will be on your P&l.

 

[joselopezde]

How is doing to the prop firms based on rebates these days?