Absolutely not.

We do not run a b-book (and are not permitted to under our current license). All of our clearing falls under the “agency only” model, and trades are passed through directly to liquidity partners and ODPs. Thus, Mt.Cook’s ONLY form of compensation is via transactional fees (i.e., round turn commissions).

Although we understand why some brokers choose to run b-books (they are required in the industry), we as a team, ethically do not like to be in a position to profit from our client’s losses. Instead, we try to focus our efforts on servicing aspiring traders who are striving to be profitable over the long-term. We have built our business around this model, and this ensures our interests are always aligned with our clients.

In addition to the important tips listed in the section above about misaligned interests adding up, it’s simply best to just ask your brokerage transparently via email (for a paper trail), the following 2 questions. 1) Are you permitted by your regulatory license to run a b-book (or hedge my positions)? And if so, 2) Is my account currently on a b-book (or can it be switched to a b-book if I am not profitable)?

Most brokerages who are licensed will be required to answer this truthfully if it is not transparently disclosed to you (which it should always be). Although some brokers are very clever at dancing around a direct answer to this question, question number 1 is very important, as if a brokerage obtains a license to b-book, they usually are.

Additionally, brokers offering enticing bonuses, or those who have high pressure boiler room sales teams, are other obvious indicators that your broker’s model is based around continually luring in, and turning over a high volume of clients who consistently lose money.

We are strongly apposed to the high pressure sales model, and want our clients to enjoy a pleasurable trading experience on their own pace and stage of their trading career.

Our pricing tiers are fixed, and are based on USD currency, and are “notionally priced”.

For example;

Our Mt.Cook Account pricing is $37.5 USD, per million, per side (or 0.00375% notional). This is the same as $7.50 USD, per standard round turn lot. This is for all USD based pairs (i.e., USD/xxx pairs).

Because this is notional ECN pricing (i.e., institutional pricing and the same way banks quote prices), it means that all other pairs (i.e., EUR/xxx, GBP/xxx, CHF/xxx, CAD/xxx, NZD/xxx, AUD/xxx) are calculated by multiplying the $7.50 x each other pair’s exchange rate with USD.

So some pairs may actually work out to be a bit more than $7.50 USD per standard round turn lot. While other pairs work out to be a bit cheaper than this. While all USD/XXX pairs are exactly $7.50 USD per standard round turn lot.

When you fund your account, unless otherwise agreed upon, your account will be setup automatically as per the tables above with Mount Cook pricing (for deposits < $25K), with Mount Kilimanjaro pricing, (for deposits between $25K-$100k) or with Mount Everest Pricing (for  deposits > $100k).

At the end of the month, if your volumes exceed your account pricing type, please contact us, if you wish to bump to a higher tier based on our volume tables above. We will conduct a simple volume review on your account, and upon confirmation, switch your account to the new agreed upon pricing tier.

Quite tight. In fact we feel that very few FCMs match our NET cost to clients (i.e., the “all in cost” of our spreads plus our round turn transactional cost) across all currency pairs. We configure our pricing in partnership with our liquidity partners to be an optimal mix of tight spreads and sufficient market depth.

Our spreads are widest during the roll over hour (5pm – 6pm EST), the market open hour on (Sunday evening at 5pm EST), high impact news releases, and sometimes during the early Asian session. They are the tightest during the high volume sessions. We obtain extremely competitive pricing due to our liquidity relationships on both our DMA and ECN streams.

To some traders it is very important. To others, much less. It depends on your trading strategy. If for example you are an algo trader looking to capture 1-2 pips as your target profits, then spreads significantly matter and play a major role in your bottom line. However, traders going for bigger pip targets, (and especially traders placing larger orders) may care much less about spreads and more about market depth as they want to place large orders and get in and out of the market with ease at the real-time price they see on their terminals.

Our spreads are somewhat configurable with our liquidity partners, based on the amount of market depth we back them with. As such, given that our target client base is largely professional traders we look to have a good middle ground combination of both tight pricing and sufficient market depth for large ticket trading.

The best way to view our spreads is to access them in our live environment. We are happy to give you read-only logins to a live, unfunded account to view our price action and spreads in real time.

Alternatively, a popular approach is to open a demo account which is also reflective of our exact spreads in the live environment. Our demo accounts enable you to use our fully functional trading platform, in real market conditions, but with virtual funding, and is a great way to get familiar with our trading environment before funding and trading live.

We charge one simple all-inclusive, transactional commission fee that is volume based on any trades made.

The only other fees incurred by clients, are ones levied by our liquidity, clearing, and technology partners (i.e., spreads, swaps, MTMPL’s) and those charged by 3rd parties (not us) for deposits/withdrawals (i.e., Visa/Master card charges, bank wire fees etc…).

That’s not really a question, but a statement that gets brought up occasionally.

DISCUSSION: We don’t claim to have the tightest spreads in the industry, and never have. Simply because we do not know what other brokers are doing behind the scenes. We only know intimately what we have built for our client base, and can confidently say that we are very proud of it, and strongly feel that we have some of the most quality liquidity, and competitive pricing that we have been able to obtain after many years of working in the industry.

Spreads are something that are VERY dynamic and always changing, and a fair comparison must be tracked across multiple pairs (especially currency cross pairs), across different markets, and for lengthy periods of time as they are always changing from day to day, and week to week, and are always responding to market events and dynamics.

Furthermore, we aggregate upwards of 18+ independent liquidity sources in our ECN which uses a ‘Smart Order Routing Algorithm’ (SoRa) that both rewards and punishes liquidity sources, not only for the most competitive pricing, but also based on the “quality” and “integrity” of the quotes received (i.e., speed, fill rate etc..). It also has the ability to find pockets of deep, hidden liquidity within its network, enabling traders to improve pricing on large orders. So as liquidity changes, our ECN adapts along side this.

Some brokers keep extremely tight spreads, with no volume behind them. This means they are great for small ticket trading, but not sustainable for larger orders. Others have the opposite. Others have synthetic feeds, or are simply running risk-books (ensuring tight spreads and zero slippage). Every broker structures this differently, but at Mt.Cook, we have built what we feel to be a very robust liquidity offering consisting of both tight pricing and market depth, to cater to a wide audience of traders. We also have two completely separate aggregations for our clients to access under one roof for diversification – our ECN and DMA liquidity streams.

Our liquidity providers and our technology providers bundle their cost in to our spreads and swaps and mark-to-market costs, and/or they charge us a transactional commission. These are negotiated in advance based on our business and long-standing relationships with them. We then build our transactional commission costs on top of our final product.

Aside from our transactional commissions all costs are exactly what we get from our liquidity partners, ODPs, PBs, and technology providers, and are passed on to our clients to trade on directly. We serve as a neutral, execution only service, and simply charge transactional commissions for access to our dynamic liquidity, via our custom trading environment.

Our transactional commissions are charged notionally, and automatically, on a per trade basis on the open and close of your trades as you make them in real time.

In the extremely rare occasion that it may happen, we offer negative balance protection on our ECN accounts. This are not available on our DMA accounts however.

Sometimes your Metatrader4 account will not match your ECN back office exactly due to a number of different reasons (aggregated swaps, portfolio execution, MTMPL’s booking at rollover and re-opening on the ECN), however usually this value is not far off. We have a script that we run periodically to sync the two platforms, and in some cases a manual sync is required.

However, please note that the trades and values, fix logs, and time/sales values in the ECN are always accurate and reflect TRUE market settlements and take precedence over MT4. On our ECN, MT4 is simply a GUI connected to our  ECN trade engine via a custom integrated bridge. Thus the ECN back office always reflects the true and accurate value of your account and positions.

Short answer – Yes. This is not common, but it happens.

DISCUSSION: Both our ECN and DMA trading streams reflect the “real market”, and because our feeds are not “synthetic” and we do not b-book our clients, sometimes trades are prone to slippage like any other. If a brokerage tells you they have no slippage, they are either running a synthetic feed (i.e., b-booking you with no real market fill) or they are simply not being honest. The more sensitive the trading style is, the higher chance of encountering slippage.

When orders are sent out to be filled by a liquidity provider or bank, they are filled at the best available price whether the fill price is above or below the price requested. In reality, this is a normal market phenomenon, and is due to the spot market being decentralized and often having a huge imbalance of buyers and sellers.

Although rare, slippage can work both in a traders favor, or against them if it occurs (positive or negative slippage). Certain times and market events are more prone to this occurrence than others such as high volatility news releases and rollover. We have two different liquidity streams for our traders to choose from which both mitigate against slippage as much as possible and in very different ways. Mt.Cook does not control for, or provide any guarantees against slippage (either positive or negative). Again this is a normal market phenomenon that we must all plan for and contend with when trading in the real (live) spot market.

MTMPL stands for Market To Market Profit/Loss. Mark to Market is a method of measuring the fair value of accounts that fluctuate in time. It aims to provide a realistic appraisal of an insitution or company’s current financial situation based on current market conditions. This method is mostly used on institutional platforms, and it helps to show the current value of the assets. In case of FX trading, this only occurs on non x/USD trades that are held over the rollover. It happens because such trade is closed on the rollover, and then reopened right after, at the same price. While x/USD pairs have a fixed pip value, the prices of USD/x pairs’ pip values fluctuate with the exchange rates.

Here is an example on a long 1 lot USDCAD trade;  The trade trade was opened on Day 1 at price 1.2188, and closed on Day 2 at price 1.2344. This means a 156 pip profit. The pip price on the retail platform is calculated only once, which is on the close price, therefore the pip price was 8.10 USD/pip, and total profit 1,263.60 USD.

The Institutional platform is a little more complex, as it adds another step to the calculation. The pip value is calculated on every rollover. In this case the trade was held only through one rollover, which means the trade was subject to Market To Market calculation only once, while this made the trade consist of two parts, P/L on Day 1, and P/L on Day 2.

The trade opened on Day 1 at price 1.2188 (same as on the retail platform). In the backoffice that trade got automatically closed and reopened at the rollover price 1.2272. On Day 2 it automatically opened at the same price as it closed before (1.2272). Then that trade got finally closed on Day 2 at the price 1.2344. This part was again the same as on the retail platform.

This automatic close and reopen on the rollover changed the pip value. On Day 1 the pip value was determined by the rollover close price (1.2272), and on Day 2 it was determined by the actual close price (1.2344).

To break down this trade, it made 84 pips on pip value 8.15 USD/pip, and 72 pips on 8.10 USD/pip. The P/L on the retail model only considered one pip value for the whole 156 pips, where total P/L was 1,263.60 USD. The institutional model that considered the change in pip value made 1,267.80 USD profit. The difference is 4.20 USD, which in this case would be credited to the MT4 trading account as MTMPL.