The complaint:
“I find it very laughable that an offer is bought or a bid sold before it even appears on the live order board!!! It is very worrying to notice that offers to sell are bought before they even appear on the board, and by the same token bids complete before bids even appear on the live order board !!!!!! The only people to possibly be able to do such thing is Bullion Vault itself, I believe they have a few second delay in their system so that they get to see all offers, bids before they go live on the the actual board, hence many a times no one else gets even see these bids/offers on the live platform! It's like saying the system is rigged!”
The reviewer does not understand that 1 out of every 2 orders which execute will never be posted on an order board. The liquidity provider’s (market maker’s) order will always be seen there. The liquidity consumer’s order will not – because it has already matched.
There is always a visible gap between the best bid and the best offer shown on an order board. For a trade to occur that gap must be bridged. A new bid must match an existing offer, or a new offer must match an existing bid.
For example, if gold is bid at 39,950 (by this reviewer, possibly) and offered most cheaply at 40,000, then if a new consumer arrives who is happy to pay the offer price he will bridge the gap by bidding 40,000, 50 more generous than our reviewer, and he will buy his gold immediately.
His 40,000 bid will not post on the order board because it matched in full without ever needing to advertise for a counterparty. He consumed available liquidity.
Now the ticker will evidence a trade occurring at 40,000 arising from a bid which never made it to the order board, because it bridged the gap to the offer price. Our reviewer is seeing these trades on the ticker, but nothing remotely underhand or unusual has happened. Buyer and seller matched at a price higher than our reviewer was prepared to bid. Even though he was on the best bid button, his bid was 50 too low.
So the ‘laughable’ aspect, and the many exclamation marks are just poor understanding, dressed up as a wicked conspiracy, which happens a lot on the internet. Luckily I am confident most Trustpilot readers are capable of sorting out the good sense of proper explanation from conspiracy theory.
However, for completeness, I will tell our reviewer how to prove his accusation!
Post your limit order. It doesn’t matter which it is, bid or offer.
Whatever your bid, no trade in your market will pass across the ticker at a price BELOW your live bid. If it does, we are guilty as charged.
Conversely, whatever your offer, no trade in your market will pass across the ticker at a price ABOVE your live offer. If it does, we are guilty as charged.
But I would caution against spending too long watching for this, because it has never happened.
On the other hand, if you confuse the two, and feel cheated when a trade happens above your bid, or below your offer, this doesn’t count. This indicates that the system is working with the usual elegance of the marketplace and forcing you (and us too) to quote better prices to consumers if we want to do business.
I reassure Trustpilot’s readers that if they participate in BullionVault they get the scrupulously fair pricing which only an openly accessible, competitive marketplace can deliver. Any user who posts the best price will trade with the next consumer, for as long as their price is the best for that consumer. I guarantee it.
Do, please, experience this for yourself, perhaps even try it ‘risk-free’ with the silver we credit your account with when you register.
Yes, of course there is very active competition to be the best quoted price, and I love that the elegant market pressure of open competition forces BullionVault to quote better prices than all its users if it is to buy or sell any bullion at all. Last week, as is typical, we lost that competition for 55% of transactions, which were dealt directly between our users, and cut us out of a dealer’s usual role (and profits). No other bullion dealer lets its customers compete with its own quoted prices, and deal directly with each other at the prices they choose.
I am extremely proud of the way we made this openly accessible bullion exchange work, to create competition and improve bullion prices for buyers and sellers alike. It helped win us the Queen’s Award for Enterprise (Innovation) and is why we remain consistently around 7% cheaper than the cheapest trading of coins or small bars.
Do visit our help page at https://www.bullionvault.com/help/FAQs/FAQs_interface_1.html
Paul Tustain
Founder and Chairman
