Commission

May 4, 2004
23
0
11
Bristol
#1
Hello All

Just a basic question? And to clear things up.

If a trading firm asks you to execute an order say. Sell FTSE future at 4350 and as a trader I was to sell it at 4340. Would I make 10 ticks as my commission? Also on the understand that the firm may have a contract to split any profits say 50%, 50% with me.

Marketmakers
 

TWI

Well-known member
Jan 22, 2004
2,516
245
73
London
#3
Depends if you are an execution only broker or a broker dealer. The broker dealers work basis executing orders at better than given and keeps the spread. There are people making money on execution like this both from clients and in hedge funds where a system tells them to sell so many of x at a price in the next x minutes.
The disadvantage is that if, as a broker dealer, you miss the price yet the market has traded through there you have to honour the trade so you can take a hit by taking the additional risk.
 

BBB

Member
Dec 7, 2003
1,071
3
48
Location Location
#5
Also - thats how fx works. You trade at the brokers quote who will be a few pips outside the 'real' market. The pips he makes on top covers his risk of the 'real' market moving between filling you and covering his exposure.
 
May 4, 2004
23
0
11
Bristol
#6
The broker dealers work basis executing orders at better than given and keeps the spread. There are people making money on execution like this both from clients and in hedge funds where a system tells them to sell so many of x at a price in the next x minutes.


Hello Twalker

Thanks for the reply

The position is for a hedge fund manager are they broker dealers? If I was to be clever and excute a sells order for them lower than the price the hedge fund wants to sell will I get the spread.

Thanks once again

Marketmakers