Negative Spreads from Forex brokers?

[McPott]

You know, if someone had mentioned this to me about a month ago, I wouldn't have beleived them, however, I was searching around the other day and found myself in a Forex discussion and this guy was showing us his quote sheet from brokers and incredibly we saw his spread for only one currency was -0.9 !!! Which means, technically, he's paying negative spread, which means technically, they're paying him the spread, on top of what he makes!

How is this possible!?

[Charles]

I've seen this too but have no idea how it works, I believe you need some sort of spread manager that lets you use two brokers at once, and if one broker has a spread much less than the other, you might get a negative difference... that's the only thing I can think of. Sounds amazing though!

[Charles]

Does this help?

The Czech yield curve steepened in bearish fashion as the domestic market tried to catch up to the negative development in core bond markets, which followed the US payrolls report on Friday afternoon (when the Czech fixed income market had been already closed). So for instance the 10Y swap rate finished the session 7 bps higher, while the negative spread between Czech and euro forwards 5Y/5Y dipped by 4 bps. Interestingly, the weaker Czech currency barely affected money market rates. Today, the market might track developments in the Eurobond market, which is now waiting for Wednesday’s ECB meeting.

[McPott]

I dunno, I still don't really get it, there's got to be a way!

[ACE]

wow, getting paid to trade? where do I sign up?

[DickP]

i believe you need to be a hardcore institutional trader to do this, not for the timid, nor the novice.

[McPott]

was anyone able to find an answer to this?

[Jones]

I still don't see how this is possible McPott...

[sean41]

You know, if someone had mentioned this to me about a month ago, I wouldn't have beleived them, however, I was searching around the other day and found myself in a Forex discussion and this guy was showing us his quote sheet from brokers and incredibly we saw his spread for only one currency was -0.9 !!! Which means, technically, he's paying negative spread, which means technically, they're paying him the spread, on top of what he makes!

How is this possible!?

Hi there Mcpott !
I never thought what you said was possible. I got confused there.

[McPott]

Actually this is completely possible, I saw the proof. I wish I saved the screenshot.

[2fxPON]

I do believe this is possible, it has to deal with interbank spread differentials, if you trade from one bank to another, but I don't know how you can do it without huge accounts at big banks

[FXman]

i'd love to hear more about this, getting paid to trade ??? EXCELLENT

[whitley]

This sounds VERY interesting, keep looking. I'd love to get paid to trade

[McPott]

I assure you all, I know what I saw, and he explained it himself as literally being paid by this negative spread phenomenon.

[Mike]

McPott does this discussion help? http://www.fxstreet.com/forum/showthread.php?t=3365

[Wolfgar]

McPott does this discussion help?

When I heard there was such a thing as a negative spread, my ears perked up, to get paid to trade by your broker is amazing idea. But this seems quite complicated using this method, almost gimmicky.

[Mike]

Sorry, that was the only relative thing about this topic I could find without digging many more pages deep into Google.

[ChartWizQ]

For this broker the spread they offer is irrelevant. They may as well offer zero or even negative spreads. It works like this. You place an order. Within a few seconds you get confirmation that your order (say buy EUR at 1.5875) was received. Now make yourself comfortable because what follows may take 30-60 seconds. If in that time the price moves with you even by one pip (say to 1.5876) then you get a requote at some crazy prize sometimes few pips higher than the max for the period. But if the price moves against you (say to 1.5870) then 30-60 seconds later you get a confirmation of an opened position which by then is 5+spread pips in the red. And now your nightmare is just starting. The market keeps moving against you and at 1.5860 you want out. You send a close position request, get confirmation within 1-2 seconds and then . you guessed it, you wait 30-60 seconds. In that time the market goes 1.5861, 1.5862. You think you are out and start breathing again waiting for confirmation that your position was closed. The market starts turning the other way, it hits 1.5855 and to your disbelief you get a requote at this rate.

Now you know you are at their mercy and basically screwed. If you confront them about the response time they will give you the usual 'check your line speed, talk to your IP' etc. And at that point you know your are wasting your time. Because at the time when your CMS station was taking you for a 30-60 seconds rides, your FXCM trading station was opening, closing or rejecting your requests with a sub-second response time. By the way the 30-60 seconds wait does not happen when the market is flatlining so if you are looking for a flat market broker go with CMS.

Is this close to what you were talking about?

[Mike]

I don't think that's what he was referring to Chart Wiz.

[usdivers]

I have seen negative spreads from time to time on the FXCM Micro platform during times of high volume.