Electronic Communication Network (ECN) brokers are within the news an increasing number of every 12 months. This sort of dealer does now not take the other facet of its patron’s trades, passing on all trades without delay to a bigger “liquidity company” alternatively – in different phrases, a financial institution or other economic group offers the trader’s opposite positions. ECN agents make their money thru commissions and spreads (the latter of which can be typically low), and as they do not take the other aspect of their customers’ trades, do not profit when their clients lose and haven't any apparent potential conflict of interest with their customers. The same cannot be said of the conventional “marketplace maker” dealer version, which takes the opposite facet of most or all its clients trades and is predicated for the lion’s share of its profit upon its traders losing cash constantly, or in figuring out which of its clients are equipped investors or now not, and covering for this reason. 

Andrey Kalashnikov Trio Markets

There isn't any doubt that the “market maker” model is easier to provide, a great deal extra common, and offers a extra quantity of easy profit. Yet in latest years we have been seeing a float of customers to ECNs and brokers at the moment are turning into extra eager to offer this option. With recent news approximately exness broker review, there is improved speculation as to whether or not broker claims to comply with an ECN model are constantly strictly accurate. With this and some other issues in mind, we placed some hard questions collectively for Andrey Kalashnikov, the CEO of Trio Markets, our top endorsed ECN agents for 2017. 

All questions and conclusion:

Hi Andrey! We’d like to start by means of asking, who're your liquidity carriers? Have you modified vendors within the last 3 years?

We are working with LMAX Prime and Invast Global now. We have now not modified them inside the final 3 years.

Are you usually able to path orders to the liquidity provider on your books presently offering the “satisfactory price”?

We mixture the pricing and execution in our Liquidity Pool. Clients are constantly completed consistent with the first-rate bid/ask available in our Liquidity companies.

How did you address the Swiss Franc disaster in 2015?

We have been a younger dealer back then. Luckily, we did now not have a big publicity on CHF at some point of the time of the incident.

What is the smallest quantity your carriers permit you to shop for from them in a single transaction?

We can send 1,000 (zero.01 Lots) on FX symbols. This varies on CFDs, however in common the minimal would be 1 settlement in maximum of important indices.

Do you need to make a marketplace quickly for strange quantities, or do you have an association together with your liquidity issuer(s) to spherical them off on the cease of every day for given costs?

I understand some Liquidity Providers works that manner, because it is not worthwhile to send the small quantities to the banks instant, therefore they briefly make the marketplace for small amounts until a tremendous quantity accumulates earlier than they skip it to the financial institution.

Our license as Retail Broker does not allow us to do such factor. We ought to transmit the orders immediately. We can't make the market even for a 2d.

What software program do you operate to procedure the transactions between your clients and your liquidity carriers? What are the important technological demanding situations you face?

We are running with PrimeXM. They are the leading Liquidity Bridge Provider within the Market. Their XCore technology permits any exchange to reach the Liquidity through FIX API. Also, delivery time of the order may be very short which offers us a superior execution.

The main venture is the question about the destiny of MT4 Trading Platform. Metaquotes may be very decided to replace it with MT5 and it will likely be a exquisite undertaking to adopt all our technological infrastructure to the new buying and selling platform.

Trading cognizance is developing and there may be incredible hunger for new matters. Traders are constantly looking for better and faster execution collectively with transparent liquidity which pushes us to add one of a kind systems inclusive of CTrader, Ninja Trader and many others. Each additional buying and selling platform brings the venture with it.

Do you observed that brokers providing a marketplace making version will locate it extra difficult to conform with regulation within the destiny? Could it be that market making models will become regarded as unacceptable over the years by governments and regulators?

At the end of the day, there may be a charge tag available on the market making licenses and there will always be brokers inclined to pay the fee.

It is positive that regulators will make matters harder and there will be greater tracking on broking sports.

If there are tests at the machine and brokers realize that they have got no other alternative but playing fair, there is no motive to make it unacceptable.

What is the strongest call for you see these days out of your clients / capacity clients?

Fast withdrawal, short reaction, correct service, truthful execution and competitive buying and selling conditions.

Do you suspect a patron ever has a logical, desirable cause to opt for a market maker model to an ECN version?

Clients are aware that marketplace makers are making their cash from client’s returned that's a completely worrying truth for them. I assume that is the principal motive why human beings would pick out ECN model over marketplace makers.

What are the principle reasons you do not offer buying and selling in CFDs on man or woman stocks?

We best paintings with Liquidity Providers which we have no doubt of their credibility. It is not clean to locate one as a way to meet our high demand and provide a extensive variety of merchandise such as the equities.

It is a great deal tougher to locate the right technology and recognize-how to integrate yourself with inventory change.

Nevertheless, I cannot call it, but we've began the procedure and we are hoping to provide the stocks in the near future.

Thanks for your time Andrey, it become thrilling for us to hear your tackle these issues and get a window into your enterprise. 

Conclusion

What we thought become maximum thrilling about Andrey’s solutions changed into firstly his frankness in sharing the basics of his enterprise model. Many ECN agents will not name their liquidity companies, and this is usually a exact signal that the broker doing so is not a “real” ECN, which is disappointing for the ones attempting to find the actual blessings which can be received by means of the use of an ECN broker. Andrey additionally showed that every unmarried one in all his consumer’s orders is sent straight away for processing – there's no market making at all, no longer even temporarily. Secondly, searching on the enterprise totally, Andrey thinks the ECN / market maker version break up will continually retain, with the marketplace presenting a gap for each kinds. He additionally mentions the approaching phase out of Metatrader 4, the most popular platform with retail the Forex market investors globally, which may additionally effect both forms of agents inside the very close to destiny.