How to become an automated liquidity Provider with Cantor Exchange

If you are a trader with Cantor Exchange, you may have seen pricing going up and down on the binary option ladder. You may ask yourself questions like:

 

  • Where do these prices come from?
  • How are these prices derived?
  • Is this automated or are people actually creating individual calls and puts?
  • How can I create my own pricing?
  • Can I automate this?
  • All of these questions have an answer. The answer may be somewhat simple depending on your computing knowledge.

 

Basically what is happening is that a liquidity provider is placing these prices in the market just like you would place a price in the market. When you go to press that ‘CALL’ button to place that buy order, you choose your price at which you would like to buy. You also choose your expiry at which you would like for the contract to expire. The process takes maybe 5 seconds or 30 seconds, depending on how fast your fingers will move on your keyboard.

 

When you see the pricing on Cantor Exchange, you are seeing the exact same thing… just automated via their free API. It is no different and ANYONE can do it. Any trader can become a liquidity provider either manually or automated. We usually do it manually and don’t even know it. A manual liquidity provider would entail placing a manual order from your computer. If you would like to do it automatically, then do it. Hire a programmer if you don’t know how.

 

The simple fact is that the more people connected to the exchange, the better pricing will become. Assume there are 10 liquidity providers and provider #1 spits out a price of a call at 55. Then liquidity provider #2 spits out a price of 54 (because he wants to get filled before provider #1). Then along comes liquidity provider #3 who places that call for 50. This is competition and is better fore all traders. If we only have a call at 55, then that is the price you get but the more people are placing calls to try to compete with that price, the lower the price will become.

 

Any trader on Cantor Exchange is a liquidity provider if they place an order that rests on the server until it is filled or rejected. YOU are a liquidity provider RIGHT NOW if you place a price as a ‘Good till canceled’ order. This is what a liquidity provider does, Just because you are placing 1 contract about 5 times per day doesn’t mean that you are any less of a market participant. You are already a liquidity provider. The question is, ” Do you want to become an automated liquidity provider on Cantor Exchange?” If you want to do it as an automated process, follow these steps below.

 

  • Decide you want to become a liquidity provider.
  • Contact Cantor Exchange and get their free API. (with FIX protocol)
  • Write your automated program. (…or hire a programmer)
  • Connect your program using a FIX protocol. (…or hire  a programmer)
  • Hook up to the exchange. (They will work with you).
  • Bing Bang! You are now an automated liquidity provider.

 

Now the question is, ” What algorithm do I want to use? Should it be the Back and Scholes model or should I use my own automated program?” A simple answer is this… Who the hell cares? If what you use is working and it would work automatically, AND you want to connect automatically, then do it. Don’t worry about conforming to what other say the best pricing model is. If you have something that works, then do it if you want to.

 

If you want to do it yourself and you have the programming skills, then great! If not, start looking for programmers on a sites such as elance or freelancer. https://www.elance.com/r/contractors/q-FIX%20Protocol or https://www.freelancer.com/job-search/api-fix-protocol-programming-forex/1/?t=s&utm_expid=294858-371.o5wPboGdRvqEQqPxiFWOQg.1&utm_referrer=https%3A%2F%2Fwww.google.com%2F . I know there are programmers to help you because the following url shows a trader that was looking for programming services for Cantor Exchange API and  just got 2 bids. This means that at least 2 programmers are willing to help. https://www.freelancer.com/projects/php/Cantor-exchange-API/

 

You can type into Google many search terms like ” API programming” or “Automated Trading Programming”. Start searching and there are many programmers out there that will help you. Many traders like to complain, gripe, bitch, and moan about pricing but they refuse to step up. We are traders. We trade against each other. You want to automate your own trading? Then start looking. Start researching.

 

Simple as that. Watch these videos to understand what an API/ fix connection is.

 

 

Find out more at cantorexchange.com or cxmarkets.com

 

 

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