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.