I see where you are coming from: You're from one of those big banks that (IMHO) strangle the innovation, almost without paying attention. But as you seem so much more knowledgable about this, a few answers from you can save me a lot of money - hopefully you'll agree to answer?
> Sort of like what you do with an FX trading account?
Can you name an FX trading account that matches two users (rather than user and market maker?) I'd like to move my money there. Doubleplusgood if it's anonymous like the CME.
> Or, if you think the spread is so sinister, you can go and make a market on the spread as well.
Have you tried that? I have. And got thrown out of multiple FX venues because I was profiting at the owner's expense; all of these venues profit by making markets and netting locally. In a symmetric market, there's no other player who can throw you out when you're smarter than they are. The best they can do is not trade with you (and if the market is anonymous, they can't even do that without stopping trade entirely).
And depending on your strategy, the spread might be very sinister. I can (could, anyway) make money on the super competitive EUR/USD if I'm allowed to make markets. I can break even on the buy side if the spread is <1 bp. I can make more on currencies with larger spread if I'm allowed to make markets. But I'm not.
> You pay the spread to an MM on all of these.
Dude, have you ever traded CME, Eurex, Liffe or almost any exchange other than NYSE and NASDAQ? (or, traded NYSE/NASDAQ these through the old INET or ARCA?) If you paid to an MM when you did, your broker was cheating you. There were no privileged market makers on these exchanges.
> As a former trader at a multi-trillion dollar Swiss bank
Funny. As a former quant whose software traded trillions in notional (not that it says much, given that 3 eur roundtrip could get you >120,000eur notional) I can assure you I know what I'm talking about. And no, it wasn't in the NYSE or NASDAQ. And no, I wasn't paying any MM. And yes, if I had to pay the spread, I wouldn't be able to make any money.
> there are a number of de-centralised, inter-linked currency trading venues in place.
Can you name one that has symmetric anonymous trading, like CME or Eurex or LIFFE does? Because the biggest names that claimed to (Currenex, HotspotFX) didn't - and I know that because I witnessed that first hand.
If you can, I'd be happy to start trading there. Please let me know of one.
Comments
I see where you are coming from: You're from one of those big banks that (IMHO) strangle the innovation, almost without paying attention. But as you seem so much more knowledgable about this, a few answers from you can save me a lot of money - hopefully you'll agree to answer?
> Sort of like what you do with an FX trading account?
Can you name an FX trading account that matches two users (rather than user and market maker?) I'd like to move my money there. Doubleplusgood if it's anonymous like the CME.
> Or, if you think the spread is so sinister, you can go and make a market on the spread as well.
Have you tried that? I have. And got thrown out of multiple FX venues because I was profiting at the owner's expense; all of these venues profit by making markets and netting locally. In a symmetric market, there's no other player who can throw you out when you're smarter than they are. The best they can do is not trade with you (and if the market is anonymous, they can't even do that without stopping trade entirely).
And depending on your strategy, the spread might be very sinister. I can (could, anyway) make money on the super competitive EUR/USD if I'm allowed to make markets. I can break even on the buy side if the spread is <1 bp. I can make more on currencies with larger spread if I'm allowed to make markets. But I'm not.
> You pay the spread to an MM on all of these.
Dude, have you ever traded CME, Eurex, Liffe or almost any exchange other than NYSE and NASDAQ? (or, traded NYSE/NASDAQ these through the old INET or ARCA?) If you paid to an MM when you did, your broker was cheating you. There were no privileged market makers on these exchanges.
> As a former trader at a multi-trillion dollar Swiss bank
Funny. As a former quant whose software traded trillions in notional (not that it says much, given that 3 eur roundtrip could get you >120,000eur notional) I can assure you I know what I'm talking about. And no, it wasn't in the NYSE or NASDAQ. And no, I wasn't paying any MM. And yes, if I had to pay the spread, I wouldn't be able to make any money.
> there are a number of de-centralised, inter-linked currency trading venues in place.
Can you name one that has symmetric anonymous trading, like CME or Eurex or LIFFE does? Because the biggest names that claimed to (Currenex, HotspotFX) didn't - and I know that because I witnessed that first hand.
If you can, I'd be happy to start trading there. Please let me know of one.