Question about Fixed Spread VS Commission

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Postby 4x=0 » Tue Nov 14, 2006 7:06 pm

jhtumblin wrote:Are you talking about the spread @ time of rollover? If so it is not exorbitant it is actual.

We know it's real. Real HUGE. It's actually, really, very large. Exorbitant, yes. Best not to trade at those times. Or around the daily maintenance. However, as the above image suggests, EFX spreads are usually always very tight.

About the ECN v. Bucket debate: My broker is hosting a live webinar on Thursday conerning various topics such as Dealing-Desk v. Non-Dealing-Desk platforms, which could be generally translated to mean "fixed v. variable brokers". Perhaps I will return with the truth on the matter.

Plus the webinar will be featuring a
special guest Panelist who has been a professional trader for the past 16 years.

Should be awesome. Especially with the additional "benefits of trading LevelII" topic.


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Postby BR2982 » Sat Sep 29, 2007 2:02 am

Hello Everyone,
This is my first post here, been lurking for about a week reading the different topics. I want to apologize about re-opening a topic that has been dead for about a year.

My wife and I was recently introduced to on-line trading and we have been exploring different platforms(forgive me if wrong terminology) The platform we are practicing on is FXCM trading stationII, have been for about three weeks. We wanted to try,research a couple of platforms for a month to see which we like best. Just downloaded EFX and will probally start playng next week.

I will get to the point, while practicing of fxcm I did notice that spread usually larger on the long positions ex. I would take a long position say at 114.851 and after I do all the functions to get in. I would gander at the open positions tab and the opening price is 114.875 which starts us in the hole 2.4 pips correct. All I have to do to break even is close the postion when it reaches 114.875 At this point I make no money but the platform makes money from the 114.851 correct which is2.4pips or.24 or2.40 or 24.00 or 240. or 2400. depending on your margin. I would assume this platform is a fixed spread.

Does the commission platforms charge a flat fee(1.20 round trip) or a percentage(.002)?

Thank you in advance for any insight.


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Postby dbw451 » Sun Sep 30, 2007 1:14 am


ECN brokers' FOREX commissions can be a little more complicated than either just fixed or percentage. For example, Interactive Brokers is a tiered percentage with a fixed minimum. The percentage tiers are based on trade value. IB's current FOREX commission structure is:

< $25,000 USD => 1 basis point * Trade Value
<= $1,000,000,000 USD => 0.20 basis point * Trade Value
<= $2,000,000,000 USD => 0.15 basis point * Trade Value
> $2,000,000,000 USD => 0.10 basis point * Trade Value

$2.50 USD minimum per order for all tiers
where 1 basis point = 0.0001.

Now there is still a quote spread that your trade needs to overcome to be profitable but the quotes are the best available quotes and not marked up like the spreads of many bucket shops. In other words, with IB you know how much you're paying IB for commissions, the commissions are not hidden in an inflated artificial spread.


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Postby Trade Viper » Sun Sep 30, 2007 2:24 am

Avery whats up, send me some Advil I have a headache From this thread. Actually there is some good stuff here. The one thing nobody has mentioned is that you cannot scalp with a fixed spread, 3 wide = a move of 9 to make six, or better yet 8 to make five. So scalping is very hard. Also with a fixed spread you are going through a deal desk and not STP, if you want to trust a deal desk, well no whining later. CurreneX continually will show choice on the EUR, of course that is my hub, others may be different.

At this time EFX is as close to CurreneX and an institutional feed as you can get.

When we were setting up I spoke to FXCM about setting up on CurreneX, they did a demo walk through with me, and since I had already set up a demo account with another broker I could compare the two. I saw that the FXCM CurreneX feed was three wide while the other broker was 1 to choice on the EUR. I asked why the difference and I was told that 3 wide was the real market and 1 to choice was an "artificial" market. Yeah right, needless to say I am not with FXCM.

By the way, I would really like to try some of your stuff but as you know I am a trader and not a programmer, so as soon as your wandering partner returns from his jet setting lifestyle, maybe you can convince him to code up the straddle to work with NT build 14

Anyway thanks for an alternative view.

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Postby TheRumpledOne » Sun Sep 30, 2007 2:17 pm

Ha ha, Viper, too funny.

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