MIG explains its execution model, no real news there
MIG Bank has just launched a new campaign aimed at explaining its execution model. Basically they claim to be using

MIG Bank has just launched a new campaign aimed at explaining its execution model. Basically they claim to be using similar to FXCM’s agency model – where banks ‘compete’ for prices and clients only execute with them. I don’t have any intimate knowledge of how exactly it works at MIG but I can safely say that no broker whatsoever passes 100% of deals to liquidity providers and I mean NONE. Most brokers put large or profitable traders on STP servers while dealing against smaller or less profitable clients. And if you think of it this model makes sense as you can’t really pass small deals to banks (MIG lists almost 20 of them) as they naturally don’t really deal with small clients. Good execution for smaller trades for now can only happen through a market maker but this obviously creates other types of problems.
However MIG claims full transparency which is what set me off – although they do list their liquidity providers there’s not much transparency beyond that. We do not see any hard numbers of execution or spreads amid the recent transparency trend sweeping the industry. My understanding is that MIG doesn’t disclose whether your deal was executed with any of its LPs and with whom exactly. There’s just this vague phrase which cannot help but make you think why is it there in the first place: “The prices obtained by us from our liquidity providers are 100% transparent and can be disclosed to you at anytime.” The prices CAN be disclosed?
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Bottom line, until MIG really shows exactly with whom the deal was executed and what the B-book is, there’s no transparency here and it is certainly not a Revolution.
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MIG Bank, the worlds first Forex broker to become a Swiss bank, is again at the forefront of innovation by offering a revolutionary new Fully Transparent Dealing model.
In order to ensure MIG BANK’s clients get the highest possible liquidity and best market prices, MIG BANK works with a pool of liquidity providers, consisting of major prime banks. These liquidity providers compete to offer MIG BANK their best prices for the clients order execution.
MIG BANK explains the transparency model further, “The prices we obtain from our liquidity providers are 100% transparent and can be disclosed to our clients at anytime. Our advanced IT infrastructure and price aggregator system allow us to constantly receive quotes from all of our liquidity providers, instantaneously analyze them and identify the best price available to fill our client orders.”
MIG BANK goes onto say, “We then add our mark-up and execute our clients orders at the best market price in a matter of milliseconds with no dealer or human involvement.”
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“I can safely say that no broker whatsoever passes 100% of deals to liquidity providers and I mean NONE.”
Whoa! That is not a true statement.
so we are talking about our own trading commentary or aggregation of banks/brokers/analysts etc?
so we are talking about our own trading commentary or aggregation of banks/brokers/analysts etc?
Sure, why don’t you go to a broker that accepts all lot sizes equally and claims to be a true STP/ECN broker and ask them if they have separate routing engines for smaller lot sizes? That would answer the question. The problem here is that the person that would need to prove such a claim is you, not me. You need to go to a legit STP/ECN broker and get them to say that they can’t route sub-full lot orders to a bank.
Maybe. It seems to me that you are implying that the big banks don’t accept liquidity under a full lot. That’s pretty much been debunked a long time ago. If that wasn’t your point, then maybe you are right.
only distributing his book
only distributing his book
Michael, I may have not understood the marketing material properly but it doesn’t say anywhere that they are an STP, in fact they emphasize that they get prices from the liquidity providers but they (MIG) are filling your orders – so I am not sure your orders are actually going anywhere (as oppose to what FXCM claim). Additionally the following statement makes me wonder if they ever push any liquidity along: “However, with this policy it does not make any difference to you whether MIG BANK is counterparty to your trade or not because you are guaranteed that your order… Read more »
Well, to play devil’s advocate for a moment, I guess one could argue that if (and this is a big if) they actually don’t manipulate the price stream coming in at any time *and* if they don’t play any of the usual games with execution (intentional slippage, rejections of trades that go immediately into profit, and other Virtual Dealer Plugin -style practices) then it shouldn’t really matter who actually took the opposite end of the trade — losing trades will be losing trades, and winning ones will win anyway. In theory, at least. Just to be clear, I’m not actually… Read more »
we could easily access and aggregate, but where is our added value here?
we could easily access and aggregate, but where is our added value here?
I didn’t read it this way so they either have a brilliant marketing manager that managed to deceive everyone or they have an incompetent marketing manager who forgot to mention that they actually send the orders to the liquidity providers (I am betting on the first). In any case this campaign doesn’t smell that good 😉
— Asaf.