MB Trading to pay for Limit Orders on its ECN
Manhattan Beach Trading Financial Services, Inc. (“MBTFS”) and MB Trading Futures, Inc. (“MBTF”) (collectively “MB Trading”), which is a technology-driven,
Manhattan Beach Trading Financial Services, Inc. (“MBTFS”) and MB Trading Futures, Inc. (“MBTF”) (collectively “MB Trading”), which is a technology-driven, low-commission brokerage specializing in order routing in FOREX, Equities, Futures, and Options through various global exchanges and electronic networks, announced today that it will begin paying $1.95 per $100,000 in currency executed for Forex Limit orders posted that add liquidity to its FOREX ECN.
”This is a game changer for the retail FOREX industry and the next logical step for our FX ECN,” CEO Ross Ditlove states. ”Paying for Limit orders continues the drive to a fully transparent and efficient retail FOREX market place. It rewards our retail clients with lower trading costs and deeper liquidity.” MB Trading consolidates quotes from major bank liquidity providers and customers, displaying them in the first fully transparent retail order book. Currently, customers pay $2.95 per $100,000 in currency executed on the MB Trading system. This significant change gives traders further incentive to post their Limit entries and exits on the FX ECN for all other retail participants to see.
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It’s quite an intriguing offer in my opinion. If I understand the situation correctly then what MB Trading does here is providing an incentive to traders to become price givers (as opposed to passive price takers which what most traders in this market are) and in turn profiting from it as liquidity providers to other brokers/liquidity pools. It’s an interesting model where everybody have an incentive to introduce Limit Orders, thus reducing the spread and increasing volume. I wonder if other brokers will follow.
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Thanks to all the friends who sent me these news with their own comments and opinions.
Thanks to all the friends who sent me these news with their own comments and opinions.
Michael:
Thanks for the post above and all your continued support. Keep up the great work!
“It’s an interesting model where everybody have an incentive to introduce Limit Orders, thus reducing the spread and increasing volume.”
We believe by providing an incentive to our clients to add their limit orders to our system, we will attract more liquidity, which in turn means tighter spreads and overall lower trading cost. There is no better way to be perfectly aligned for our customers’ best interests than to create a system that improves for everyone as more people use it.
Michael:
Thanks for the post above and all your continued support. Keep up the great work!
“It’s an interesting model where everybody have an incentive to introduce Limit Orders, thus reducing the spread and increasing volume.”
We believe by providing an incentive to our clients to add their limit orders to our system, we will attract more liquidity, which in turn means tighter spreads and overall lower trading cost. There is no better way to be perfectly aligned for our customers’ best interests than to create a system that improves for everyone as more people use it.
Finally!
Intelligent pricing that will continue to clean up what has always been a shady business. MB Trading should be recognized for a very progressive move.
Not sure what the deal is, still available on practice (for me at least) but have heard that ppl aren’t seeing it for trading today
Not sure what the deal is, still available on practice (for me at least) but have heard that ppl aren’t seeing it for trading today
Finally!
Intelligent pricing that will continue to clean up what has always been a shady business. MB Trading should be recognized for a very progressive move.
if you think of it, it’s retail liquidity providers.
if you think of it, it’s retail liquidity providers.
I have to say that this is very interesting offer which exist for a long time in the Futures world and it’s nice to see it being implemented by a forex broker. Being able to get inside the spread is a huge value to the Forex traders IMO.
Nicely done MBT!
— Asaf.
I have to say that this is very interesting offer which exist for a long time in the Futures world and it’s nice to see it being implemented by a forex broker. Being able to get inside the spread is a huge value to the Forex traders IMO.
Nicely done MBT!
— Asaf.
This was my final straw. I promised myself that I would research a new FX broker for the new year just to see if I was still at the right place. After reading your article and applying a small degree of math to my past six months of orders, assuming 50% posted, I would have saved over $7k USD for the same trades compared to my FXCM account. Needless to say opening the account at MBT tonight was painless. Thank you Michael!
B
This was my final straw. I promised myself that I would research a new FX broker for the new year just to see if I was still at the right place. After reading your article and applying a small degree of math to my past six months of orders, assuming 50% posted, I would have saved over $7k USD for the same trades compared to my FXCM account. Needless to say opening the account at MBT tonight was painless. Thank you Michael!
B
If the market is 1.3101 /1.3102 and u put limit order to buy @ 1.3100 u will get paid as well when your order is filled ..
If the market is 1.3101 /1.3102 and u put limit order to buy @ 1.3100 u will get paid as well when your order is filled ..
this what Justin said : ” By the way, that would also be if you put the order in to buy at 1.8990 (below the whole quote). Your order is out there for the rest of the market to see if the price drops, and if you get filled, you get paid “
this what Justin said : ” By the way, that would also be if you put the order in to buy at 1.8990 (below the whole quote). Your order is out there for the rest of the market to see if the price drops, and if you get filled, you get paid “
Michael:
Any limit order adds liquidity – be it inside or outside of the current spread.
Furthermore, if the 1.3100 buy limit order mentioned in the example got filled then be assured that this limit order *was* the bid for at least a fraction of a second as the market moved towards it – it could not have been filled otherwise.
So yes, I think the commission applies to all limit orders that get filled, not just those posted inside the spread.
@Joe – the most recent update for Q1 2013 is here http://forexmagnates.com/q1-us-broker-profitability-report-showing-signs-of-optimism/
@Joe – the most recent update for Q1 2013 is here http://forexmagnates.com/q1-us-broker-profitability-report-showing-signs-of-optimism/
Michael:
Any limit order adds liquidity – be it inside or outside of the current spread.
Furthermore, if the 1.3100 buy limit order mentioned in the example got filled then be assured that this limit order *was* the bid for at least a fraction of a second as the market moved towards it – it could not have been filled otherwise.
So yes, I think the commission applies to all limit orders that get filled, not just those posted inside the spread.
No, it only applies to those limit orders which get filled at the exact price and by another client. If not, pay as usual.
i knew you were going to reply to this post!
i knew you were going to reply to this post!
No, it only applies to those limit orders which get filled at the exact price and by another client. If not, pay as usual.
Even if your order get filled by a liquidity provider u will get paid , inside the spread or at better price , u will get paid , this what justin said , the important thing it is a limit order …
Even if your order get filled by a liquidity provider u will get paid , inside the spread or at better price , u will get paid , this what justin said , the important thing it is a limit order …
Let me jump in here and clarify.
Any limit that rest on our system; either placed below the market, above the market or between the market, when executed will receive an immediate credit of 1.95 per 100k. The order can be filled by anyone to receive the credit, banks or other customers on the system.
@Bogdan – where do you rate NADEX? They seem to be carving a niche of more advanced traders using their system. Wouldn’t you expect Cantor to be offering a similar product and market target?
@Bogdan – where do you rate NADEX? They seem to be carving a niche of more advanced traders using their system. Wouldn’t you expect Cantor to be offering a similar product and market target?
Let me jump in here and clarify.
Any limit that rest on our system; either placed below the market, above the market or between the market, when executed will receive an immediate credit of 1.95 per 100k. The order can be filled by anyone to receive the credit, banks or other customers on the system.
Mike: Mind explaining? MBT’s webpage: http://mbtrading.com/pricing.aspx Lists a few examples and the only condition appears to be that the limit order has to ‘rest’ in the order book. (That is a natural requirement – specifying a limit order with a price that executes immediately is a market order essentially and adds no liquidity – a real limit order must present liquidity via the order book, so that other trades can see an possibly match it.) So the liquidity rebate – at least as explained on the MBT webpage – does not seem to depend on whether it’s filled ‘internally’ or… Read more »
Mike: Mind explaining? MBT’s webpage: http://mbtrading.com/pricing.aspx Lists a few examples and the only condition appears to be that the limit order has to ‘rest’ in the order book. (That is a natural requirement – specifying a limit order with a price that executes immediately is a market order essentially and adds no liquidity – a real limit order must present liquidity via the order book, so that other trades can see an possibly match it.) So the liquidity rebate – at least as explained on the MBT webpage – does not seem to depend on whether it’s filled ‘internally’ or… Read more »
Confirmed myself today with MBT Rep. So long as the order rest even for 1 millisecond on the Limit Book for all to see you get paid!
I absolutely LOVE what the meaning behind MB Trading’s thinking is now that i really get it.
This is just like Google with Ad Words. When you bring efficiency and transparency to a market place the benefits to participants are obvious. The opposite of a monopoly.
Way to go MB Trading!
B
Confirmed myself today with MBT Rep. So long as the order rest even for 1 millisecond on the Limit Book for all to see you get paid!
I absolutely LOVE what the meaning behind MB Trading’s thinking is now that i really get it.
This is just like Google with Ad Words. When you bring efficiency and transparency to a market place the benefits to participants are obvious. The opposite of a monopoly.
Way to go MB Trading!
B
Justin:
In THEORY, it’s very possible for every clients enter&exit market via limit orders, and on their counterparty are banks. So if that’s the case “Any limit that rest on our system when filled get paid”, it means what? It means MBT will pay every clients, so where is your company earnings coming from? Coming from banks? But these banks usually only offer liquidity they don’t take. Or has your company already revised agreements with LPs? Otherwise, I really can’t understand what’s your sayings.
Justin:
In THEORY, it’s very possible for every clients enter&exit market via limit orders, and on their counterparty are banks. So if that’s the case “Any limit that rest on our system when filled get paid”, it means what? It means MBT will pay every clients, so where is your company earnings coming from? Coming from banks? But these banks usually only offer liquidity they don’t take. Or has your company already revised agreements with LPs? Otherwise, I really can’t understand what’s your sayings.
Mike: Note that getting paid for limit orders is actually the norm on regulated, orderly markets like the NASDAQ – it’s just the wild, wild west of Forex that is a hold-out in that regard 🙂 Everyone using limit orders will only occur if you more or less assume that every trader is profitable and their take-profit orders are hit. The broker profitability stats give us a much different picture there. In practice many traders will enter or exit positions using market orders or using stop or trailing stop orders (which are conditional market orders in essence). Trailing stops are… Read more »
Mike: Note that getting paid for limit orders is actually the norm on regulated, orderly markets like the NASDAQ – it’s just the wild, wild west of Forex that is a hold-out in that regard 🙂 Everyone using limit orders will only occur if you more or less assume that every trader is profitable and their take-profit orders are hit. The broker profitability stats give us a much different picture there. In practice many traders will enter or exit positions using market orders or using stop or trailing stop orders (which are conditional market orders in essence). Trailing stops are… Read more »
Something tells me many “CAN NOT” follow MB’s example for fear of early extinction. Even IB’s to FXCM or GAIN who have less of a markup and charge a commission are stuck. It seems MB charges that commission which obviously has enough gas in it to cover the posters rebates and thus is a bridge to their plan. In my opinion what MB Trading is doing is setting the stage for ‘retail to retail’ with far less banks. That would mean take $2.95 and pay $1.95 on a whole lot of flow. Not sure how the math does not work?
Something tells me many “CAN NOT” follow MB’s example for fear of early extinction. Even IB’s to FXCM or GAIN who have less of a markup and charge a commission are stuck. It seems MB charges that commission which obviously has enough gas in it to cover the posters rebates and thus is a bridge to their plan. In my opinion what MB Trading is doing is setting the stage for ‘retail to retail’ with far less banks. That would mean take $2.95 and pay $1.95 on a whole lot of flow. Not sure how the math does not work?
is that stupid me, or in the end you will have to pay 10usd per 1m traded? 29.5 per 1m one way – 19.5 rebate = 10 bucks per 1 mil. correct? IF roundtrip = 20 bucks then. hmm
is that stupid me, or in the end you will have to pay 10usd per 1m traded? 29.5 per 1m one way – 19.5 rebate = 10 bucks per 1 mil. correct? IF roundtrip = 20 bucks then. hmm