hyperscalper
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There is no such document. But lmax can decide to close your account without giving you a reason, just like you can close the account without needing to do any explaining.
Bottomline is that lmax had to agree to "police" their exchange for toxic flow, otherwise LPs would not have agreed to post firm quotes w/o last look. So if LPs start to complain you may have a problem.
But i doubt that you posting limits between the BBO can possibly be interpreted as toxic. On the contrary, adding liquidity benefits the marketplace (and lmax directly too, because for client to client orders lmax collects more fees. LPs dont pay fees to lmax for passive executions).
Thanks. Take a moment to distinguish between "active" and "passive" executions. Also, clarify "client to client". I'm particularly interested in understanding the "mix" of LPs, direct LMAX brokerage clients, and "other" participants on the exchange. Got any insights on that?
For example, at Dukascopy there is no liquidity inside the spread, unless one of their clients happens to act as a counterparty. Everyone else on the book is a Market Maker and will not trade "wholesale" with you, as they are the "wholesalers". But on LMAX there should be a wider range of "non Liquidity Provider" participants who act as counterparties, which are themselves not the LMAX brokerage's clients? See what I'm asking?
Like, for example, on LinkedIn you might try to sell a product. But *everyone* on LinkedIn is trying to sell you a product; and there are no actual "clients" who would buy from you on LinkedIn. They're all on the hustle to sell something, not to buy from you... Just as an analogy. And a purely Retail brokerage, like Dukascopy, as good as it is, has a book which consists only of Liquidity Providers or Market Makers as I call them. There are no "retail guys" using Market orders to act as counterparties to your Best Bids, and when they do come in, the size is insignificant.
I know because I tried to play that game for a long time, and that's why we moved the wholesale scalping
objectives to LMAX.
Thanks and Good Trading !
HyperScalper