Asking the right questions

M

Maverick1

When thinking about selecting a retail broker, what are the top 5-10 questions one should ask? Here are some that I've thought of, but by all means, please chime in.

1. Is the broker FCM clearing or non-clearing FCM?

2. Does the above matter?

3. What is its business record with the NFA?

4. Are fills reliable?

5. Can one truly evaluate the quality of fills at one broker vs the next?

6. Does the selection of a trading platform affect the quality of the fills?

7. What kind of contingency plans do you have? For storms, blackouts etc

etc

Your thoughts/answers? Thanks
 
Hello Maverick1,

8. What happens if I check my account one day and it shows $0.00? How will you give me money back that was stolen? Is the money insured?
 
SimpleMeLike said:
Hello Maverick1,

8. What happens if I check my account one day and it shows $0.00? How will you give me money back that was stolen? Is the money insured?
More...

Hi SML, indeed, good thing to remember MF Global and PFG Best. What's the deal with FDIC insurance? Are clearing FCM's the only ones to have access to it via securities accounts?
 
9. What instruments are available for trading?
10. Which markets will I get access to?
11. What currency will my account be and under what legal jurisdiction (which country)?
 
With some "brokers" in some countries, you actually need to be sure they are brokers in the first place, not just some bank account with a fancy name and PO Box address.....
 
Maverick1 said:
When thinking about selecting a retail broker, what are the top 5-10 questions one should ask? Here are some that I've thought of, but by all means, please chime in.

1. Is the broker FCM clearing or non-clearing FCM?

2. Does the above matter?

3. What is its business record with the NFA?

4. Are fills reliable?

5. Can one truly evaluate the quality of fills at one broker vs the next?

6. Does the selection of a trading platform affect the quality of the fills?

7. What kind of contingency plans do you have? For storms, blackouts etc

etc

Your thoughts/answers? Thanks
More...

#1. Does not matter
#2. Does not matter because a non-clearing FCM must have its customers' trades cleared by a clearing FCM.
#3. Yes, you should check Background Affiliation Status Information Center (BASIC) for any FCM or Introducing Broker you do business with. https://www.nfa.futures.org/basicnet/
#4. Should not matter as long as they send their orders to the CME/ICE etc. Some will get you there a little faster but that is partly based on issues outside routing.
#5. No the quality of the fills is based on liquidity at the exchange. Your FCM should not be internalizing future's flow.
#6. Unlikely.
#7. Have the ability to call an order desk.

Bob
 
If you are a big player,

does the broker accept collateral such as banker guarantee?
margin rates
easy and good rates for shorting stocks
 
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