Spread betting at FXCM
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Jason Rogers
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Hi Hacks,
I notice your post was right around 5pm New York time. That is the time of rollover. Banks will sometimes widen their spreads briefly right around that time as trades are rolled over from one trading day to the next with the appropriate amount of rollover interest being credited or debited. Banks will typically return their spreads to normal within a few minutes of rollover being completed.
Jason
calamancini
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Great Place for those people.
R.Charnock
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How about reducing the spreads on indices?
Re: FXCM's New Lower Spreads
Spreads shouldn't be your primary concern. It should be speed of execution, slippage, spread widening and a whole host of other tricks that brokers play.
Take a look at FXCM's EURCHF chart and compare the spikes on it to any other reputable broker. Here, I'll save you the time...
http://my.jetscreenshot.com/6325/20120829-3oya-336kb.jpg
Noticed how buy orders never got filled (demo admittedly, do you think I'm crazy!), but I bet stops got hit.
Maybe one day this business will be cleaned up, but in the meantime, beware!
Spreads shouldn't be your primary concern. It should be speed of execution, slippage, spread widening and a whole host of other tricks that brokers play.
Take a look at FXCM's EURCHF chart and compare the spikes on it to any other reputable broker. Here, I'll save you the time...
http://my.jetscreenshot.com/6325/20120829-3oya-336kb.jpg
Noticed how buy orders never got filled (demo admittedly, do you think I'm crazy!), but I bet stops got hit.
Maybe one day this business will be cleaned up, but in the meantime, beware!
Jason Rogers
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Re: FXCM's New Lower Spreads
Hi SimonK,
In regards to the tall spike on August 6/7th that you can see in the EUR/CHF chart below, that was a bad tick (an erroneous price fed through by banks). The Trade Audit Committee reviewed the affected accounts and made appropriate credits to our clients for any losses they incurred as a result.
As for the smaller spikes you see on the chart, notice how they are evenly spaced. In fact those spikes occur right around 5pm New York time everyday. That's because banks will often widen their spreads during trade rollover which occurs right at that time. I mentioned this in an earlier post regarding banks widening spreads during rollover time.
FXCM does not widen the spreads; we simply pass through the pricing we receive from the banks plus our pip markup. When you see the spreads widen, that means the banks are doing the widening. Since long positions on EUR/CHF earn rollover, banks will often widen spreads right around 5pm to discourage traders from entering a position just before 5pm to earn the rollover interest with relatively low risk.
Here's a link with more information about trade rollover: Rollover Calendar | Forex Education | DailyFX
Jason
Hi SimonK,
In regards to the tall spike on August 6/7th that you can see in the EUR/CHF chart below, that was a bad tick (an erroneous price fed through by banks). The Trade Audit Committee reviewed the affected accounts and made appropriate credits to our clients for any losses they incurred as a result.
As for the smaller spikes you see on the chart, notice how they are evenly spaced. In fact those spikes occur right around 5pm New York time everyday. That's because banks will often widen their spreads during trade rollover which occurs right at that time. I mentioned this in an earlier post regarding banks widening spreads during rollover time.
FXCM does not widen the spreads; we simply pass through the pricing we receive from the banks plus our pip markup. When you see the spreads widen, that means the banks are doing the widening. Since long positions on EUR/CHF earn rollover, banks will often widen spreads right around 5pm to discourage traders from entering a position just before 5pm to earn the rollover interest with relatively low risk.
Here's a link with more information about trade rollover: Rollover Calendar | Forex Education | DailyFX
Jason
Jason Rogers
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CFD Trading Hours for Labor Day Holiday
Hi Everyone,
Just a reminder that this coming Monday, September 3rd is the Labor Day holiday in the US. Forex will continue trading as normal 24-hours-a-day next week. The holiday trading hours for CFD products are listed below in GMT time. Please manage your trades accordingly.
Jason
Hi Everyone,
Just a reminder that this coming Monday, September 3rd is the Labor Day holiday in the US. Forex will continue trading as normal 24-hours-a-day next week. The holiday trading hours for CFD products are listed below in GMT time. Please manage your trades accordingly.
Jason
Jason Rogers
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Hi RC,
Since CFD products were already on Dealing Desk execution, their pricing remains the same. The new lower spreads apply to forex, since before we only offered forex trading via No Dealing Desk execution.
Jason
Re: FXCM's New Lower Spreads
FXPro EURCHF chart:
http://my.jetscreenshot.com/6325/20120831-mma8-370kb.jpg
Notice there were no spikes to the downside. I could post 100 different broker examples here if I could be bothered.
Hi SimonK,
In regards to the tall spike on August 6/7th that you can see in the EUR/CHF chart below, that was a bad tick (an erroneous price fed through by banks). The Trade Audit Committee reviewed the affected accounts and made appropriate credits to our clients for any losses they incurred as a result.
As for the smaller spikes you see on the chart, notice how they are evenly spaced. In fact those spikes occur right around 5pm New York time everyday. That's because banks will often widen their spreads during trade rollover which occurs right at that time. I mentioned this in an earlier post regarding banks widening spreads during rollover time.
FXCM does not widen the spreads; we simply pass through the pricing we receive from the banks plus our pip markup. When you see the spreads widen, that means the banks are doing the widening. Since long positions on EUR/CHF earn rollover, banks will often widen spreads right around 5pm to discourage traders from entering a position just before 5pm to earn the rollover interest with relatively low risk.
Here's a link with more information about trade rollover: Rollover Calendar | Forex Education | DailyFX
Jason
FXPro EURCHF chart:
http://my.jetscreenshot.com/6325/20120831-mma8-370kb.jpg
Notice there were no spikes to the downside. I could post 100 different broker examples here if I could be bothered.
Jason Rogers
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Hi Hacks,
A dealing desk broker is able to create their own pricing regardless of the actual prices they are able to hedge at. Since the banks that provide liquidity in the market typically widen their spreads at this time, it’s likely that a broker that offers a fix spread of 1 pip at 5pm is taking the market risk on themselves. You will remember that WorldSpreads even offered a 0 pip spread. This mean that they will have to compensate for this is one of 3 ways, possibly all 3.
- If a client places an order that the broker would have to offset for a loss with banks, then they might requote the client instead.
- They might make the money back in rollover costs. For example: with FXCM, you will earn rollover on a long EUR/CHF position. With many other brokers, the rollover on a long EUR/CHF position is negative. That means, if your intention is to hold EUR/CHF long term, you would be paying rollover everyday with these brokers to stay in that trade.
- If the broker would rather not requote the client, they would have to take the loss themselves. If this is done too frequently in the hopes of winning business from other brokers, it will put the firm at financial risk.
Jason
Jason Rogers
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Re: FXCM's New Lower Spreads
Hi Simon,
FXCM does not determine the spreads for our clients on currency pairs. Forex spreads are based on the best buy and sell prices we receive from 10+ liquidity providers plus our pip markup. That means if you see our spread widen, it’s the banks that are widening their spreads. At 5pm, they will widen their spreads as they roll positions over from one day to the next. This is the time chosen by banks around the world because the New York trading session has ended, and it’s still a couple of hours before trading picks up in Tokyo. It’s a relatively quiet time in the market.
As to why you see other brokers not widening their spreads at this time, it could be any number of reasons as I mentioned to Hacks. Some may be taking the market risk on themselves, and/or like FXPro the may charge rollover interest on long EUR/CHF positions instead of paying rollover interest as we do.
Jason
Hi Simon,
FXCM does not determine the spreads for our clients on currency pairs. Forex spreads are based on the best buy and sell prices we receive from 10+ liquidity providers plus our pip markup. That means if you see our spread widen, it’s the banks that are widening their spreads. At 5pm, they will widen their spreads as they roll positions over from one day to the next. This is the time chosen by banks around the world because the New York trading session has ended, and it’s still a couple of hours before trading picks up in Tokyo. It’s a relatively quiet time in the market.
As to why you see other brokers not widening their spreads at this time, it could be any number of reasons as I mentioned to Hacks. Some may be taking the market risk on themselves, and/or like FXPro the may charge rollover interest on long EUR/CHF positions instead of paying rollover interest as we do.
Jason
Re: FXCM's New Lower Spreads
Do you have a screenshot of your bank's actual spread at that time?
I'd love to see some good hard evidence for your assertion, because I'm having problems finding any broker (ECN or not) that does what FXCM does!
Do you have a screenshot of your bank's actual spread at that time?
I'd love to see some good hard evidence for your assertion, because I'm having problems finding any broker (ECN or not) that does what FXCM does!
R.Charnock
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Re: FXCM's New Lower Spreads
FXCM is a spread bet provider, making the market for punters like all the others, so why use banks' wider spreads as an excuse? If Capital Spreads can offer fixed 1pip, why not FXCM?
FXCM is a spread bet provider, making the market for punters like all the others, so why use banks' wider spreads as an excuse? If Capital Spreads can offer fixed 1pip, why not FXCM?
Jason Rogers
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Re: FXCM's New Lower Spreads
Hi R.Charnock,
We don't offer fixed spreads, because the prices you see on our platform are determined by what's being quoted to us from our liquidity providers, and their prices are constantly changing. The result is a variable spread. Even for spread betting accounts, we use the same No Dealing Desk price feed as a base to derive prices and execute orders as we use for non-spread betting accounts. We take the best bid price and the best offer price from 10+ liquidity providers and add a pip markup. Here is a post where I explain this in more detail with examples.
Fixed spread brokers have to manage the additional risk they take on from quoting prices that may not reflect changes in the spreads coming from their liquidity providers. This could result in re-quotes for their clients. Since FXCM uses the our No Dealing Desk price feed as a base to derive prices and execute orders on both our No Dealing Desk and Dealing Desk execution models, there no re-quotes on our platform.
Jason
Hi R.Charnock,
We don't offer fixed spreads, because the prices you see on our platform are determined by what's being quoted to us from our liquidity providers, and their prices are constantly changing. The result is a variable spread. Even for spread betting accounts, we use the same No Dealing Desk price feed as a base to derive prices and execute orders as we use for non-spread betting accounts. We take the best bid price and the best offer price from 10+ liquidity providers and add a pip markup. Here is a post where I explain this in more detail with examples.
Fixed spread brokers have to manage the additional risk they take on from quoting prices that may not reflect changes in the spreads coming from their liquidity providers. This could result in re-quotes for their clients. Since FXCM uses the our No Dealing Desk price feed as a base to derive prices and execute orders on both our No Dealing Desk and Dealing Desk execution models, there no re-quotes on our platform.
Jason
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Jason Rogers
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Hi Gle101,
Trading Station Web and Trading Station Desktop are virtually identical in terms of execution speed. MT4 is a bit slower, but we're talking milliseconds. Our MT4 servers are located in the New York area. If you are interested in minimizing the latency on MT4, you might like to know that FXColo provides VPS service from the same datacenter as our MT4 servers. If you use their VPS, it would allow you to send orders to our MT4 servers with less than 1 millisecond of latency on average.
Jason
Thanks a lot Jason.
Jason Rogers
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US Stock Index CFDs closed due to Hurricane Sandy
Due to Hurricane Sandy, US equity and futures markets have been closed or subject to reduced hours. As a result, trading on the following CFD products was closed at 9:15am EDT: US30, SPX500, NAS100 and JPN225.
These products will remain closed until the CME exchange provides additional details on reopening: Futures & Options Trading for Risk Management - CME Group
Due to Hurricane Sandy, US equity and futures markets have been closed or subject to reduced hours. As a result, trading on the following CFD products was closed at 9:15am EDT: US30, SPX500, NAS100 and JPN225.
These products will remain closed until the CME exchange provides additional details on reopening: Futures & Options Trading for Risk Management - CME Group
