Prime of Prime Broker

Yeah except in many brokers' cases as permitted by their local regulatory bodies, they put in that "guarantee" with client funds as the collateral. I wonder how that works as in that SNB crisis if the client's balance is negative, where is the collateral? Other client's positive balance?

And in ECN and MM broker who hedges: Clients' losses are my losses also my gains but still more losses from the hedging. Double whammy. So I guess for a broker, you either go pure MM or pure ECN but with large capital clients who can absorb the losses. In between, you potentially face much risks.

Question: What are the advantages of trading via a Prime of Prime broker versus a "Standard" broker like for example LMAX?

If you arent trading big tickets, like > 10m per click, none really. Nothing that cannot be handled by for example interactive brokers or lmax just as well.

You can access to the biggest FX ECN like Currenex Hotspot... A big part of the whole FX is made there : you can access to the "official" rates.

They arent any more or less official than anywhere else. They are basically the same like everwhere. And with 20bn ADV Hotspot is only a very tiny fraction of the market.

10m partial execution, nightmare. ..... Their so called low spreads are also very tricky, floating each side separately. I think PoP is more marketing of some exclusivity.

There are no official prices, price feed same for all, can be lower spreads, but depends. Anybody knows why ECNs display quotes in amounts 1m, 500, 5M, 700k?
because that quotes drop from banks clients that did not meet counterpart between clients. So automated system move such orders to the street means ECN.

quotes are not excatly the same everywhere. I've found sometimes charts wih different candles.

May be but very small difference, integrated brokers charts a less trusted. Use 3rd party only charts software providers.

i was looking at them and velocity. I found it strange they wouldn't set up a demo login for cnx/hpsot where I could view live prices and your comment pretty much explains it. How would you rate velocity in comparison?

Such as? eSignal? Bloomberg? They all come from the "market" which is really made up by all those "ECN's", interbank network and etc. The fact that forex is traded OTC, there is REALLY no "official" or "trusted" prices.

As I said they all are pretty similar, differ only by GU interfaces, instruments, etc. But better to use separate charts from broker.
Of course good institutional charts are $$$, that's why many traders try to save some money. There're lots of providers like Sierra charts, ITFinance, etc.

Velocity Citi?

Brokerage costs are getting repriced are the SNB and it's both a PM and LP nightmare....

I paraphrase my PB below:

costs per trade have been around USD 200/ticket + 2% capital charge - everyone is a little different

This will be across the street

See article below about JPM:

Client clearing for over-the-counter derivatives is uneconomic under current capital requirements, and the revenue generated by the business will have to increase "to a multiple of its current level" if banks are to stay in the game, JP Morgan has warned.
In its investor day presentation earlier today, the US bank said "current market economics are incompatible with capital rules in their current form for many of the leading clearing providers".

The comments came as JP Morgan revealed it will likely have to hold an extra 4.5% of common equity Tier I against its risk-weighted assets under the US Federal Reserve's extra charge for global systemically important banks (G-Sib), which is due to be phased in from next year.
Separately, the US supplementary leverage ratio (SLR) requires the bank to hold 5% of capital against leverage exposures at the bank holding company level, and 6% at the bank level, from 2018. Dealers have criticised the SLR's treatment of client clearing, as it requires clearing members to hold capital against the client leg of cleared trades, and does not allow client initial margin to reduce the leverage exposure calculation.
These new capital requirements clash with JP Morgan's approach to the clearing business, the bank said. Prior to the introduction of the G-Sib charge and the SLR, JP Morgan focused on capturing market share. While the cost of building out the business has outstripped revenue so far, the bank had "expected attractive returns at scale and maturity".

It also said the business "was not built on halo revenues or synergies with other business lines". In other words, it was not designed to be a loss leader supporting client activity across other parts of the bank, but to be a revenue generator in its own right.

Page 1 of 2JP Morgan warns on swaps clearing - 24 Feb 2015 - Risk print view
25/02/2015http://www.risk.net/print_article/risk -magazine/news/2396801/jp-morgan-warns-on-s...

The JP Morgan presentation said a client clearer of over-the-counter derivatives trades with a 10% market share would have to commit between three and six times more capital to the business if the bank's primary constraint is the G-Sib framework. If the bank's primary constraint is the SLR, it would have to need to commit between five and six times more capital.

Non-bank clearers are unlikely to have the size, scale and liquidity required to support the market in place of dealers, the presentation said. It highlighted three possible outcomes: either prices will increase significantly to cover the extra capital costs; capital rules will become more aligned with economic risk; or more OTC clearing providers that are G-Sib or SLR constrained will exit the market.

Clearing sources at rival banks agree the rules are tough on clearing. "Regulatory requirements around capital and SLR will be extremely influential on the willingness and ability of banks to offer this service going forward," says a clearing source at one US bank.

So far, three banks have pulled back from client clearing for OTC derivatives -BNY Mellon, Royal Bank of Scotland and State Street. While none were among the biggest swaps clearers, it has sparked concern about how the market would cope if one or more of the larger players chose to exit the market.

The declining number of clearing members was raised as a potential competition issue in a report released by the UK Financial Conduct Authority (FCA) last week.
Banks are not alone in calling for the SLR impact on clearing members to be reined in. Earlier this month both the chairman of the US Commodity Futures Trading Commission, Timothy Massad, and the US House Committee on Agriculture said segregated initial margin should be allowed to reduce leverage exposure.
Dealers have looked at other ways to reduce the leverage exposure in the meantime. Last year, Citi changed its accounting policy to remove $3 billion of OTC client initial margin from its balance sheet, which forms the basis of the leverage exposure measure. UBS followed suit on February 15, removing Sfr4.2 billion ($4.5 billion) of futures client initial margin from its balance sheet.

Lol Sierra chart's forex data come from FXCM...

But I agree, better to use an independant data provider to check quotes

You can use any feed in Sierra depends on your possibilities

Spreads of a real PoP that only takes institutional people FYI

how safe you reckon fixi is compared to say gft or fcstone

http://companycheck.co.uk/company/05577579/FIXI-PLC

Since I am actually on the buy-side I did ask these software vendors what they're like, I've heard good things, better things than FCStone and etc.