Trading Station II Execution Information
WHY TRADE AT FRIEDBERG DIRECT
OVERVIEW
The information contained on this page is intended to inform prospective and current traders of some of the
features and risks associated with off-exchange retail forex trading. The content is primarily geared towards the
FXCM Trading Station II functionality, but it may also be used for general information regarding execution in
the forex market. Order types and execution procedures may vary depending on which platform is utilized.
Please be advised, no single document can completely address each and every risk associated with transactions
in a financial market.
SLIPPAGE
Friedberg Direct aims to provide clients with the best pricing available and to get all orders filled at the
requested rate. However, there are times when the expected price on an order is different than the executed
price. On the most basic level, slippage occurs when there is insufficient liquidity at a desired price. The size of
a client order, the Time In Force on the order, and the volume available at the quoted price are key factors that
influence final execution.
MARKET ORDERS
The "Market Range" market order allows traders to manage the amount of potential slippage they are willing to
accept on a market order. Zero indicates no slippage is permitted. When zero is selected, the trader is telling
Friedberg Direct his order may only be executed at the exact price requested. The Time In Force will also affect
the execution of a market range order. If Fill or Kill ("FOK") is utilized then liquidity for the entire order must
exist for the trade to be filled. If Immediate or Cancel ("IOC") is utilized then liquidity must exist for at least
some of the order to be filled. Additionally if the size of the IOC order exceeds available liquidity then only the
portion of the order that can be filled will be executed and the remaining amount will be rejected.
The "At Market" orders do not prevent slippage or limit slippage to a specified range. An At Market order with a
time in force of FOK indicates the order is to be filled immediately and entirely at an available market price. An
IOC At Market order indicates the order is to be filled immediately, but not entirely, at an available market
price. A GTC At Market order can be filled partially multiple times until the order is filled completely or the client
cancels the remaining amount. The size of the market order, significant news announcements and rapidly
changing market prices can result in execution at a different price than desired. If the size of the At Market
order exceeds available liquidity then the order can be split into smaller orders at different prices.
LIMIT ORDERS
Limit orders will be filled at the desired price, better than desired price, or not at all. There is no execution
guarantee with limit orders as client orders are filled at a first come first serve basis and may remove available
liquidity. It is possible a limit price will be touched and the order will not fill. Limit orders will not be executed at
a worse price than the desired price.
Friedberg Direct is a division of Friedberg Mercantile Group Ltd. , a member of the Investment Industry Regulatory
Organization of Canada (IIROC), the Canadian Investor Protection Fund (CIPF), and all Canadian Exchanges. Friedberg
Mercantile Group Ltd. is headquartered at 181 Bay St., Suite 250, Toronto, ON M5J 2T3, Canada.
Accounts are opened with and are held by Friedberg Direct which clears trades through a subsidiary of FXCM Inc, a publicly
traded company listed on the New York Stock Exchange (NYSE:FXCM). Customers of FXCM Canada may, in part, be
serviced through subsidiaries of FXCM Inc. FXCM Inc does not own or control any part of Friedberg Direct and is
headquartered at 55 Water St., 50th Floor, New York, NY 10041 USA. FXCM’s liquidity providers include global banks,
financial institutions, prime brokers and other market makers.
STOP ORDERS
Stop Orders behave like GTC At Market orders. The order is designed to limit a trader's losses but a stop order
can be slipped from the desired price. The size of the order will also play a role in determining what price the
order is filled at. If the size of the Stop order exceeds available liquidity then the order can be split into smaller
orders at different prices.
MARGIN CALLS
If account equity falls below margin requirements, the Trading Station II will trigger an order to close some or
all open positions. When positions have been over-leveraged or trading losses are incurred to the point that
insufficient equity exists to maintain current open positions, a margin call will result, and open positions must
be liquidated. In most cases, the Trading Station II will close all open positions when a margin call is triggered.
However, this is subject to liquidity, and in some illiquid scenarios, some positions may remain open. The size
of the order(s) being liquidated play a significant role in the speed of execution and prices received. The larger
the order being liquidated the greater likelihood of slippage and partial fills.
There is no price certainty on a margin call and there may be instances when liquidity does not exist at the
exact margin call rate. As a result, account equity can fall below margin requirements by the time orders are
filled, even to the point where equity account becomes negative. Friedberg Direct will not hold traders
responsible for deficit balances in this scenario, but clients should be cognizant that all funds on deposit in an
account are subject to loss. Friedberg Direct also recommends that traders use stop orders to limit downside
risk in lieu of using a margin call as a final stop.
DELAYS IN EXECUTION
Friedberg Direct provides its clients with No Dealing Desk Forex execution. Friedberg Direct utilizes an STP
(straight-through processing system) whereby client orders are sent through to liquidity providers and filled on
their prices in a near-instantaneous fashion. During periods of high volume or an occurrence of hardware or
software failure, hanging orders may occur. Also, in the event liquidity providers are unable to provide liquidity
to Friedberg Direct your order may experience delays in execution or you may not be able to place orders
entirely. The size of the order may also impede the speed at which the order is executed.
Keep in mind that it is only necessary to enter any order once. Multiple entries for the same order may
inadvertently open unwanted positions.
If at any time you are unable to manage your account via the FX Trading Station, you may call toll free at (888)
296-5012 or visit www.fxcm.ca for contact information.
WIDENED SPREADS
Friedberg Direct strives to provide traders with tight, competitive spreads; however, there may be instances
when spreads widen beyond the typical spread. During news events spreads may widen substantially in order to
compensate for the uncertainty in the market. The widened spreads may only last a few seconds or as long as a
few minutes. Friedberg Direct strongly encourages traders to utilize caution when trading around news events
and always be aware of their account equity, usable margin and market exposure. Widened spreads can
adversely affect all positions in an account.
Friedberg Direct is a division of Friedberg Mercantile Group Ltd. , a member of the Investment Industry Regulatory
Organization of Canada (IIROC), the Canadian Investor Protection Fund (CIPF), and all Canadian Exchanges. Friedberg
Mercantile Group Ltd. is headquartered at 181 Bay St., Suite 250, Toronto, ON M5J 2T3, Canada.
Accounts are opened with and are held by Friedberg Direct which clears trades through a subsidiary of FXCM Inc, a publicly
traded company listed on the New York Stock Exchange (NYSE:FXCM). Customers of FXCM Canada may, in part, be
serviced through subsidiaries of FXCM Inc. FXCM Inc does not own or control any part of Friedberg Direct and is
headquartered at 55 Water St., 50th Floor, New York, NY 10041 USA. FXCM’s liquidity providers include global banks,
financial institutions, prime brokers and other market makers.
GRAYED OUT PRICING
Grayed out pricing is a condition that occurs when there is no liquidity for a quote and Friedberg Direct has not
received a new tradeable quote to refresh liquidity. Clients will be unable to place trades during grayed out
periods.
HOLIDAY/WEEKEND EXECUTION
TRADING DESK HOURS
The quoted hours for the Trading Desk are from Sunday 5:15 PM (ET) through Friday 4:55 PM (ET). Orders
placed prior may be filled until 5 PM (ET). The open or close times may be altered by the Trading Desk because
it relies on prices being offered by liquidity providers.
Outside of these hours, most of the major liquidity providers are closed. The lack of liquidity and volume during
the weekend impedes execution and price delivery.
PRICES UPDATING BEFORE THE OPEN
Shortly prior to the open, Friedberg Direct refreshes rates to reflect current market pricing in preparation for
the open. At this time, trades and orders held over the weekend are subject to execution. Quotes during this
time are not executable for new market orders. After the open, traders may place new trades, and cancel or
modify existing orders.
LIQUIDITY
Please be aware that during the first few hours after the open, the market tends to be thinner than usual until
the Tokyo and London market sessions begin. These thinner markets may result in wider spreads, as there are
fewer buyers and sellers. This is largely due to the fact that for the first few hours after the open, it is still the
weekend in most of the world.
A comprehensive list of spreads can be found at www.fxcm.ca/forex-spreads.jsp. For detailed insight on market
hours and activity, please visit www.fxcm.ca/forex-vs-stocks.jsp.
GAPPING
Sunday's opening prices may or may not be the same as Friday's closing prices. At times, the prices on the
Sunday open are near where the prices were on the Friday close. At other times, there may be a significant
difference between Friday's close and Sunday's open. The market may gap if there is a significant news
announcement or an economic event changing how the market views the value of a currency. Traders holding
positions or orders over the weekend should be fully comfortable with the potential of the market to gap. One
of the great things about trading at Friedberg Direct is that outside of announced major holidays, the trading
hours routinely close only once a week on the weekends, which corresponds with the hours of liquidity
providers. In contrast, most stock exchanges close five times each week, and can gap significantly on each
day's open.
Friedberg Direct is a division of Friedberg Mercantile Group Ltd. , a member of the Investment Industry Regulatory
Organization of Canada (IIROC), the Canadian Investor Protection Fund (CIPF), and all Canadian Exchanges. Friedberg
Mercantile Group Ltd. is headquartered at 181 Bay St., Suite 250, Toronto, ON M5J 2T3, Canada.
Accounts are opened with and are held by Friedberg Direct which clears trades through a subsidiary of FXCM Inc, a publicly
traded company listed on the New York Stock Exchange (NYSE:FXCM). Customers of FXCM Canada may, in part, be
serviced through subsidiaries of FXCM Inc. FXCM Inc does not own or control any part of Friedberg Direct and is
headquartered at 55 Water St., 50th Floor, New York, NY 10041 USA. FXCM’s liquidity providers include global banks,
financial institutions, prime brokers and other market makers.
WEEKEND RISK
Traders who fear that the markets may be extremely volatile over the weekend, that gapping may occur, or
that the potential for weekend risk is not appropriate for their trading style, may simply close out orders and
positions ahead of the weekend.
CHART PRICING VS. PRICES DISPLAYED ON THE PLATFORM
It is important to make a distinction between indicative prices (displayed on charts) and dealable prices
(displayed on the FX Trading Station). Indicative quotes are those that offer an indication of the prices in the
market, and the rate at which they are changing. Market watchers, such as S&P and eSignal, compile indicative
quotes as a proxy for the market's actual movement. These prices are derived from a host of contributors such
as liquidity providers and clearing firms, which may or may not reflect where Friedberg Direct's liquidity
providers are making prices. Indicative prices are usually very close to dealing prices. Indicative quotes only
give an indication of where the market is. Equity and futures traders dealing through a broker will see indicative
quotes. Executable quotes ensure finer execution and thus a reduced transaction cost. Equity and futures
traders are used to prices being the same at any given time, regardless of which firm they are trading through
or which charting provider they are using and they often assume the same holds true for spot forex. Because
the spot forex market is decentralized, meaning it lacks a single central exchange where all transactions are
conducted, each forex dealer (market maker) may quote slightly different prices. Therefore, any prices
displayed by a third party charting provider, which does not employ the market maker's price feed, will reflect
"indicative" prices and not necessarily actual "dealing" prices where trades can be executed.
MOBILE TRADING PLATFORM
There are a series of inherent risks with the use of the mobile trading technology such as the duplication of
order instructions, latency in the prices provided, and other issues that are a result of mobile connectivity.
Prices displayed on the mobile platform are solely an indication of the executable rates and may not reflect the
actual executed price of the order.
Mobile TS II utilizes public communication network circuits for the transmission of messages. Friedberg Direct
shall not be liable for any and all circumstances in which you experience a delay in price quotation or an
inability to trade caused by network circuit transmission problems or any other problems outside the direct
control of Friedberg Direct. Transmission problems include but are not limited to the strength of the mobile
signal, cellular latency, or any other issues that may arise between you and any internet service provider,
phone service provider, or any other service provider.
Please note some features of the Trading Station II will not be available on the Mobile Trading Station. Key
differences include, but are not limited to, charting packages will be limited to five minute charts, daily interest
rolls will not appear, and the maintenance margin requirement per financial instrument will not be available.
Also, Micro account holders will be charged and debited a service fee of $0.10 per 1,000 unit lot for each trade
entered using the Mobile TS II. It is strongly recommended that clients familiarize themselves with the
functionality of the Mobile Trading Station prior to managing a live account via portable device.
Friedberg Direct is a division of Friedberg Mercantile Group Ltd. , a member of the Investment Industry Regulatory
Organization of Canada (IIROC), the Canadian Investor Protection Fund (CIPF), and all Canadian Exchanges. Friedberg
Mercantile Group Ltd. is headquartered at 181 Bay St., Suite 250, Toronto, ON M5J 2T3, Canada.
Accounts are opened with and are held by Friedberg Direct which clears trades through a subsidiary of FXCM Inc, a publicly
traded company listed on the New York Stock Exchange (NYSE:FXCM). Customers of FXCM Canada may, in part, be
serviced through subsidiaries of FXCM Inc. FXCM Inc does not own or control any part of Friedberg Direct and is
headquartered at 55 Water St., 50th Floor, New York, NY 10041 USA. FXCM’s liquidity providers include global banks,
financial institutions, prime brokers and other market makers.