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Ripple XRP added to Plus500 trading platform


mike91
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18 minutes ago, Spekul8 said:

First, they are not always on the other side of each trade. Because they are not interested in the risk as you mentioned, they will offset trades between their players.  Finding a liquidity provider to transfer the risk to is a hedge if for example there is a real big player they don't want to trade against.  Holding a "real" XRP will not provide a hedge, how will it? PLEASE explain. Not trying to be argumentative, just trying to understand why a CFD holder would hold a physical. There are CFDs on Oil, Gold, Silver, etc. Broker do not hold physicals to offset risk. 

 

 

From: http://www.independentinvestor.com/cfd/how-brokers-make-money

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HEDGING

Another crucially important but often overlooked method of making money employed by the brokers is through hedging, and investing in the markets themselves. Hedging is designed primarily as a means of mitigating losses, but it can also prove a profitable strategy for the brokers if executed correctly. Hedging is the process of matching liabilities with contradictory or complimentary positions in different markets, such that if the trader wins, the broker can offset their liability to that trade. While hedging is a difficult process to get right, it can help brokers no end financially, allowing them to minimise losses and profit from their market expertise.

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Simplified example: 1 trader, 1 broker, trader enters long CFD position without leverage (for simplicity). If broker buys the same amount of the "real" XRPs on the market, the trader's profit (which is settled using the USD) can be paid from the profits made from investing in the "real" XRPs.

 

 

18 minutes ago, Spekul8 said:

They know the small spec behavior and their entire system is geared to trade against them. 

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From the same source:

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Contrary to the beliefs of some sectors of the trading community, CFD brokers are set up to actually encourage their trading clients to succeed, and in doing so will be able to generate more revenue over the longer term. 

 

 

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15 minutes ago, T8493 said:

 

From: http://www.independentinvestor.com/cfd/how-brokers-make-money

 

Simplified example: 1 trader, 1 broker, trader enters long CFD position without leverage (for simplicity). If broker buys the same amount of the "real" XRPs on the market, the trader's profit (which is settled using the USD) can be paid from the profits made from investing in the "real" XRPs.

 

 

 

From the same source:

 

What if the net exposure of the broker is short? So let's say they have 100 players and 80 of them decide to go short because they figured the market is too high.  Then the price is plunging. How is their physical helps them then? It's a theoretical question.  

CFD brokers do not hold the underlying asset. 

 

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Its based on a case by case basis, if the trader has a track record of making money then they will pass the order into the real market. If the trader has a track record of losing money then they wont pass the order through to the market and bet against the client. Its a good start at the moment, as XRP becomes bigger we will get some ECN brokers doing it. That's what we want.

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31 minutes ago, T8493 said:
 

This is an affiliate site with a nice disclaimer "IndependentInvestor.com offers an unbiased and independent broker comparison service, but we may receive compensation from listed providers." They promote Spread Betting which is considered legal gambling and not taxed in the UK. 

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3 minutes ago, BDXRP said:

Its based on a case by case basis, if the trader has a track record of making money then they will pass the order into the real market. If the trader has a track record of losing money then they wont pass the order through to the market and bet against the client. Its a good start at the moment, as XRP becomes bigger we will get some ECN brokers doing it. That's what we want.

Agree with the first part of your statement. ECNs will do nothing for XRPs, it's just a better mechanism for speculators not the value of XRP. 

We need the Chicago Mercantile Exchange listing XRP with a delivery at the end of it. Then you have a legitimate hedging tool and possible strong addition to liquidity.  They sell all their flow to algos so it will add more volatility to the cash as well, and that will attract more "real" XRPs specs that will add liquidity. 

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9 minutes ago, BDXRP said:

Why wouldn't  ECN brokers like pepperstone not help? They pass your order through to the market and just take a commission? @Spekul8.

http://www.investopedia.com/terms/e/ecn-broker.asp 

They will physically pass your order through to the market and their liquidity providers will give them a fill. Why is that bad?

I did not say that ECN does not help the speculator. It is a better mechanism than a dealing desk, but again, it will not help the liquidity of XRP. 

In reality, FX and CFD brokers love to say they are ECN, but in fact, sell all their flow to one institution most the time.  This is how FXCM was thrown out of the industry. They went to create their own liquidity provider.  

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@Spekul8 Yeah I get that, but that "one institution" would have to own XRP wouldn't they?. I don't think all ECN brokers do what FXCM did, I always knew FXCM were a joke.

Wouldn't owning XRP help with liquidity as they would have to buy large quantities of it, the same way a bank would have to hold the asset on their books if/when XRP is used. ?

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30 minutes ago, BDXRP said:

@Spekul8 Yeah I get that, but that "one institution" would have to own XRP wouldn't they?. I don't think all ECN brokers do what FXCM did, I always knew FXCM were a joke.

Wouldn't owning XRP help with liquidity as they would have to buy large quantities of it, the same way a bank woin tuld have to hold the asset on their books if/when XRP is used. ?

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You are making assumptions here that I am not aware of. Are liquidity providers required to hold the underlying asset they are trying to make a market for?  I do not know.  

I think that LP that provide the Bid/Ask for the real XRP were incentivized with XRPs. That way they assume less risk but it was distributed to them by Ripple. 

Only bank activity will increase the rate of XRP and its liquidity.  Namely, institutions using it day in and day out for FX transmissions. The specs will not move it in the long run. Every time XRP is mentioned, I feel it's like everyone here are in the mode of  "This is it...this is the one". 

Plus500 is just someone who wants to take advantage of specs for their purposes.  This is not my "Cup of Tea". 

ok, have to prepare for trading for tomorrow....Have a good night everyone. 

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Well I work for an fx broker and when someone purchases THB or NZD for example, We as a broker may not hold the asset straight away but we have to purchase the currency from our liquidity providers which happen to be Barclays or Commonwealth bank. 

ECN brokers would work the same, they would purchase their currency through their liquidity providers. If there liquidity provider didn't own XRP how could they sell it to you? 

Joel mentions about holding XRP as an asset in his post (if it all works) all I am saying is its good that Fx brokers are listing it on their exchanges even if its CFD because obviously their is a high demand for it otherwise you wouldn't list it.

 

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19 hours ago, edwin90 said:

Plus500 silently added Ripple XRP trading

Plus500 is a trading platform (comparable to markets.com) for CFD (Contract For Difference) trading.

Even though it's for shortterm trading this addition is good I think, since it creates awareness among (day)traders.

This is what their Android app looks like:

Screenshot_2017-06-19-15-25-15[1].jpg

Very good find. I have had account with plus500 for long time, i did not use it much as i am not short term trader but i have noticed a trend that when they launch crypto on their exchange it means good days ahead for price. When they launched btc it was around 100 usd and within few months it touched 1100 usd. So fingers crossed we are gonna get surprised...?

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8 hours ago, Spekul8 said:

What if the net exposure of the broker is short? So let's say they have 100 players and 80 of them decide to go short because they figured the market is too high.  Then the price is plunging. How is their physical helps them then? It's a theoretical question.  

 

Then they short that amount - either from their own reserve or using some other liquidity provider.

However, they had to buy their reserve first on the market.

 

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CFD brokers do not hold the underlying asset. 

 

Maybe not brokers themselves, but their liquidity providers (or someone else down the chain).

The link I posted was the first Google search result with an explicit explanation. There are other more "credible" sources. Or you can go to btc-e, download MetaTrader and see if the execution of your MetaTrader CFD orders appears on the trade history of the regular btc-e exchange (if I remember correctly, it doesn't happen always/often).

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In a somewhat surprising turn of events, more good news is coming Ripple’s way. Plus500, a global leader in online trading platforms, has enabled XRP trading. More specifically, platform users can short or long XRP from now on. The platform already supported other cryptocurrencies before this addition. It is good to see XRP got added to the list. This shows there is a lot more focus on this asset than most people give it credit for.

 

http://www.livebitcoinnews.com/plus500-enables-cfd-trading-support-xrp/

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