No Dealing Desk - Q&A

Jason_Rogers · February 22, 2018, 3:21am

Hello Jazzman,

Welcome back! And just in time for the pick-up in market volatility which could make 2018 a very interesting year for the markets.

To catch you up, we simplified our account offerings. Traders now simply open an account which automatically has our enhanced execution. This means there is no minimum stop/limit restrictions, no trading restrictions on FX and CFD’s (most indices), no re-quotes, and over 89% of orders had zero or positive slippage as of our most recent execution report.

And regarding execution speed, the latest report from October 2017 (also found at the previous link) showed average execution speed of 0.033 seconds or 33 milliseconds. This is defined as the amount of lapsed time between when the order is received and when the order is executed. This excludes internet latency and post trade booking.

When you open the account, you are charged the spread on each transaction. FXCM’s accounts are spread only with a markup in lieu of additional trading commissions. If you meet volume requirements, we can enable your account for active trader pricing which can lower your trading costs even further.

To clarify the confusion about spread betting and CFDs… You can think of spread betting as simply a special account designation for traders that reside in the UK and Ireland. This special designation makes your account free from capital gains and stamp duty when spread betting. The products traded are virtually the same, except that the spread bet designation gives UK and Ireland residents the extra tax advantage.

Jason

Disclosure: The UK tax treatment of your financial betting activities depends on your individual circumstances and may be subject to change in the future, or may differ in other jurisdictions.

Barg44 · November 1, 2020, 7:54pm

Jason_Rogers:

How are the quotes determined?

FXCM receives pricing and liquidity from 10 banks. So there are 10 separate prices being quoted on the bid side (sell price) and 10 separate prices being quoted on the ask side (buy price). The execution engine on our backend shorts the prices and displays the best bid/ask on the trading platform. Here’s a short example using two banks and without fractional pips to make things simple.

Let’s suppose Bank A and Bank B are each quoting prices for GBP/USD. Here’s what each bank is quoting.

Bank A: 1.5025 x 1.5027
Bank B: 1.5024 x 1.5026

The best price being offered by the banks on the sell side (you sell and bank buys) is at 1.5025 by Bank A, and the best price being offered by the banks on the buy side (you buy and bank sells) is at 1.5026 by Bank B. Therefore the bid/ask is 1.5025/1.5026. There’s a 1 pip spread between the buy and sell price. FXCM then adds a fixed mark-up which is our compensation. Assuming there is a pip added to the bid/ask means the final price displayed on the FX Trading Station is 1.5024/1.5027. You then see a 3 pip spread.

Hello, as you have explained, FXCM Engine selects and display on the platform the best buy price and the best sell price received from liquidity providers. I was wondering, given the fact that CFD market is an over the counter market where transactions are made directly between two party, should I not be compelled to close the position at the price of the liquidity provider that acted as a counterparty when I first opened the position?
Returning to your example, neglecting any fixed mark-up added by the broker, let’s say I go long GBP/USD at 1.5026 (Bank B) and after a while Bank A prices are 1.5035 x 1.5037 and Bank B prices are 1.5034 x 1.5036. If I want to close the position, should I not be compelled to do it at 1.5034 (Bank B) instead of closing it at the best price displayed (1.5035 of Bank A)?
Thanks in advance