No more B-Book?

[AARasheed]

I hear on grapevine, FCA will ban practice of B-booking.
If yes, then this will affect nearly all brokers in the UK.
I believe this is one reason why LMAX, SAXO, etc have all started to/about to start offer ECN/bank trading services.

What you guys think?

 

[redtag12]

I hear on grapevine, FCA will ban practice of B-booking.
If yes, then this will affect nearly all brokers in the UK.
I believe this is one reason why LMAX, SAXO, etc have all started to/about to start offer ECN/bank trading services.

What you guys think?

Hi good morning,can you explain b-booking and how this would effect uk brokers?
mike

 

[AARasheed]

Hi good morning,can you explain b-booking and how this would effect uk brokers?
mike

B-booking is where broker runs a market using their own money. Price you see, is not market price. It is the price made by the broker (normally wider than market). This is not real price, it is synthetic price (OTC).
The practice is fine and is not illegal or wrong and is a good way for clients to trade quickly and cheaply.
But what has happened is many brokers can make bad prices that cause the price of their own book to move adversely. Causing slips, skews, spikes, stop loss triggers, etc.
Lots and lots of people have lost the money. So the handling of the b-book is the issue here and causing these things is what the regulators are investigating.
Nearly all the UK brokers (and most outside UK) are running books, including majority of those that claim to be ECN broker. (a false ECN and real ECN is a long story, maybe do in another post)

 

[redtag12]

B-booking is where broker runs a market using their own money. Price you see, is not market price. It is the price made by the broker (normally wider than market). This is not real price, it is synthetic price (OTC).
The practice is fine and is not illegal or wrong and is a good way for clients to trade quickly and cheaply.
But what has happened is many brokers can make bad prices that cause the price of their own book to move adversely. Causing slips, skews, spikes, stop loss triggers, etc.
Lots and lots of people have lost the money. So the handling of the b-book is the issue here and causing these things is what the regulators are investigating.
Nearly all the UK brokers (and most outside UK) are running books, including majority of those that claim to be ECN broker. (a false ECN and real ECN is a long story, maybe do in another post)

Clearly then this only applies to Market Makers as they are the ones who set the price via their Dealing desk.I mean a price is a price no matter who sets it ,however it becomes meaningless when the MM,s decide to muck about and people loose money.Well what will they do now all go off and pretend to be ECN &STP brokers.Seriously they will have to become Ecn &Stp brokers .Will they????M ike

 

[Hedge Fund Wizard]

B-booking is where broker runs a market using their own money. Price you see, is not market price. It is the price made by the broker (normally wider than market). This is not real price, it is synthetic price (OTC).
The practice is fine and is not illegal or wrong and is a good way for clients to trade quickly and cheaply.
But what has happened is many brokers can make bad prices that cause the price of their own book to move adversely. Causing slips, skews, spikes, stop loss triggers, etc.
Lots and lots of people have lost the money. So the handling of the b-book is the issue here and causing these things is what the regulators are investigating.
Nearly all the UK brokers (and most outside UK) are running books, including majority of those that claim to be ECN broker. (a false ECN and real ECN is a long story, maybe do in another post)

Hi Rasheed,

Are Dukascopy also 'B-Bookers'?

Which broker would you reccomend for Forex Scalping from London?

Saxo, Dukascopy, FxPro, Forex.com, Alpari?

Thanks in Advance.

 

[Hedge Fund Wizard]

B-booking is where broker runs a market using their own money. Price you see, is not market price. It is the price made by the broker (normally wider than market). This is not real price, it is synthetic price (OTC).
The practice is fine and is not illegal or wrong and is a good way for clients to trade quickly and cheaply.
But what has happened is many brokers can make bad prices that cause the price of their own book to move adversely. Causing slips, skews, spikes, stop loss triggers, etc.
Lots and lots of people have lost the money. So the handling of the b-book is the issue here and causing these things is what the regulators are investigating.
Nearly all the UK brokers (and most outside UK) are running books, including majority of those that claim to be ECN broker. (a false ECN and real ECN is a long story, maybe do in another post)

Also do you know of any reputable Forex Volume Data suppliers?

I can't find any, so am considering maybe going with Bloomberg FXGo, but at $2k a month, it is quite pricey, though they are commission free.

 

[AARasheed]

Clearly then this only applies to Market Makers as they are the ones who set the price via their Dealing desk.I mean a price is a price no matter who sets it ,however it becomes meaningless when the MM,s decide to muck about and people loose money.Well what will they do now all go off and pretend to be ECN &STP brokers.Seriously they will have to become Ecn &Stp brokers .Will they????M ike

According to my source, a lot of brokers are claiming to be ECN/STP. However instead of sending the trades to the bank (which a real matched principle ECN broker will do), they send to a third party (another partner broker/fund/one of their own company), who then become the counterparty.
Profits are then shared between them when the client loses.
Clever yet not illegal. The trick is to ask for the broker to show you the name of their Liquidity Provider (LP) in the currenex demo.
Nearly all will decline. I wonder why? heh heh heh!

 

[AARasheed]

AARasheed, thank you for explanation. This B-booking term is completely new to me.

uShuan,

No problem. Let me know if you have any questions or need any further information.

 

[AARasheed]

What is B- Book? binary book?

Read the beginning of this thread to find out

 

[SlowlyButSurely]

A book = clients that are good and should be hedged in underlying market - risk passed over
B book = clients that are bad traders and can be left to their own devices to lose their money over time - risk taken on