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Any experience with LMAX for FOREX trading?
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Any experience with LMAX for FOREX trading?

  #1 (permalink)
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Any experience with LMAX for FOREX trading?

Hi,

Has anyone an experience with LMAX for trading FOREX?
LMAX web site: FX Trading | Forex Trading | CFD Trading | LMAX Exchange

Note: LMAX services are not accessible to US citizens.

Two other references on futures.io (formerly BMT):
- thread on LMAX and CFD : https://futures.io/brokers-data-feeds/9523-cfds-lmax.html
- message from @fibfisherman advising me to have a look at LMAX : https://futures.io/forex-currency-trading/19986-broker-data-feed-trade-forex-tick-charts.html#post218991

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What I understand so far...

Trading: I take the example of EUR/USD (in what follows, 1 pip = 0.0001 points)
- spread: always < 0.5 pips as far as I can notice visually
- tick (in the meaning of minimum increment): 0.1 pip
- commission per side: 0.0025% of the position size with no minimum
- leverage: 1:100
- minimum lot: 0.1 contract
UPDATE: statistics on LMAX's spreads in this message below: https://futures.io/brokers-data-feeds/20044-any-experience-lmax-forex-trading.html#post219418

This seems to be quite attractive to begin trading real money (and handling psychological issues) with very small positions.
Let's suppose that stop-loss is positioned at 10 pips.
The minimal position is 0.1 contract, so the risk (stop-loss) is only $1 (+ 0.05 euro commission RT + spread)
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Minimum capital on the trading account: equivalent of $10,000

Compatibility with MultiCharts (MC): seems great!
I have not funded my account at LMAX, but the connection is already open to "have a look and test" (without trading, of course).
MC very easily recognizes LMAX, both as data feed and broker.
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Protection of capital
The following aspects are so yet very clear to me. I will continue to read documentation, and will probably exchange some e-mails with them.
- Clients' accounts are segregated, but outside UK. Does the capital protection offered by the law (in UK and France) still apply?
- Withdrawal at any time and for any amount?
- Any commission for funding and withdrawal?
- Any other fee whatsoever?
UPDATE: these questions are answered below.

I will obviously continue my homework.

Any experience feedback or comment would be appreciated!

Thanks,

Nicolas


Last edited by Nicolas11; May 9th, 2012 at 06:38 AM. Reason: Updates (visible) and fix issues with embedded images
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  #2 (permalink)
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  #3 (permalink)
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After e-mail exchanges with LMAX, I have obtained the following information.

Protection of capital
Clients' accounts are segregated. LMAX is regulated by the FSA, so funds are protected up to €100,000 [UPDATE: according to them].

Minimum deposit
There is a deposit of $10,000, but it is just an initial deposit. Later, the amount in the account can go below this level (through withdrawal or losses) and the client can continue trading (while respecting margin requirements, of course).

Other fees
No fees for funding or withdrawal.

Withdrawals
At any time, for any amount (still leaving enough margin in case of open positions, of course).

>> Obviously, if you intend to open an account with LMAX, do not trust the above and do your own checking.

Any feedback or comments on LMAX services by fellow traders would be highly appreciated.

Nicolas


Last edited by Nicolas11; May 9th, 2012 at 06:26 AM. Reason: update (visible)
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Spreads
LMAX's website allows to see their average spread on any time period ( Average Spreads )
First graph below is for last 2 months (March-April, 2012).
Second graph is since November 2010.
They are vendor's information.
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Nicolas

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  #5 (permalink)
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Good stuff Nicolas.

I have signed up for an account as well after doing some test driving via LMAX Multicharts for the last few days.

For Australian account holders it's possible to fund your account with an Australian based JP Morgan customer segregated account.

Hopefully uptake picks up as this seems to be a great place for beginners to start trading beyond SIM without risking too much money.

There have apparently been some issues with slow uptake with Goldman dumping their investment in LMAX allegedly for this reason: Goldman Sachs dumps LMAX stake


I'll update this thread with my experiences as well.

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I would be very worried about counterparty risk, since with trades in CFD you're depending on the broker to supply a quote, and they have the right to not quote anything. In practice that means that during high volatile moments, the moments when you'd like to get out the most, the chances of getting a decent fill are the slimmest.

Some interesting quotes from their customer agreement:


Quoting 
Whilst you will be trading on the MTF prices, each trade is entered into with us as
principal;

Prices on the MTF may differ from the prices on other platforms and exchanges on which
the underlying financial instrument being traded is quoted;

(..)

We may determine, acting reasonably at all times, that an emergency or an exceptional market
condition exists or is about to occur due to a cause or circumstance beyond our reasonable
control (a “Force Majeure Event”). A Force Majeure Event will include, but is not limited to, the
following:

24.1.1 where the MTF deems that an event, failure, delay or other cause has occurred or is
about to occur that prevents the MTF from providing an orderly trading service;

24.1.2 any delay or defect in or failure of the whole or any part of the Website, Trading Platform
or our communications infrastructure that prevents us from providing an orderly trading
service to our clients;

24.1.3 any cause or circumstance including, but not limited to, fire, flood and other acts of god,
strikes, riot, disruptions to energy supplies, civil commotion, acts of terrorism or war,
breakdown of equipment that prevents us from providing an orderly trading service to
our clients;

24.1.4 the failure of any relevant supplier or principal of ours, custodian, exchange, clearing
house or regulatory or self- regulatory organisation, for any reason, to perform its
obligations that prevents us from providing an orderly trading service to our clients;

24.2 If we determine that a Force Majeure Event has occurred, we may, without notice, acting
reasonably at all times,

24.2.1 suspend or modify the application of all or any of the Terms of this Agreement to the
extent that the Force Majeure Event makes it impossible or impracticable for us to
comply with the Term or Terms in question; and/or

24.2.2 close any or all of your working Orders and close all or any of your open trades in whole
or in part.

See also the suspension part of the customer agreement.

With their high account minimum of $10,000 you might perhaps opt for trading futures directly.

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  #7 (permalink)
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@Jura,

Thanks for these very interesting remarks!

1. With respect to the availability of quotes...
I suggest that CFDs will not be addressed here: they are discussed in another thread: https://futures.io/brokers-data-feeds/9523-cfds-lmax.html
For FOREX, your remark probably also applies. But is it very different from other FOREX brokers? (I don't know.)

2. With respect to Force Majeure, I have read in the Customer Agreement (24.3) that Force Majeure events shall be reported to the FSA. So I guess that they cannot "play" with that. But it remains an issue.

3. Just for clarification, $10,000 is not a minimum. It is an initial deposit. Then funds can be withdrawn and the account can reach whatever amount (for instance: $2,000) provided that this amount is higher than the margin requirements for the considered trades. At least, it is what they wrote me by e-mail.

Once more, I am not "defending" LMAX. Just trying to understand.

Thanks again,

Nicolas

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  #8 (permalink)
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An update on the minimum lot size.

Decimal lot sizes (0.1, 0.5, etc) can only be traded via the LMAX web interface and are not possible for trading via Multicharts where the minimum increment is 1.

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fibfisherman View Post
I have signed up for an account as well after doing some test driving via LMAX Multicharts for the last few days.

For Australian account holders it's possible to fund your account with an Australian based JP Morgan customer segregated account.


Hey Fib, could you link me the section on LMAX website about funding for Australian account holders? It would make funding the account a breeze if the money was going to a JP Morgan australian BSB number - no wire transfer fee and overnight transfer.

Do you have your base currency as the aussie?

I know Interactive Brokers does something similar but they have Bank of America account in Sydney.

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  #10 (permalink)
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Futures Experience: Intermediate
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Broker/Data: LMAX, Infinity Futures
Favorite Futures: EUR/USD
 
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Thanks: 167 given, 87 received



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Hey Fib, could you link me the section on LMAX website about funding for Australian account holders? It would make funding the account a breeze if the money was going to a JP Morgan australian BSB number - no wire transfer fee and overnight transfer.

Do you have your base currency as the aussie?

I know Interactive Brokers does something similar but they have Bank of America account in Sydney.

I'm actually not 100% sure now if this is possible. I ended up funding direct to UK in base GBP after there was some confusion around the use of the Australian based JP Morgan account as that suited me for other reasons anyway.

If you want to follow up PM me and I'll give you the details of the LMAX Australian based sales dude who has info on Australian funding in AUD.

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