Futures Account with insurance?

Put the absolute minimum in your account. Go to your bank and ask them to make a bank guarantee in favor of your broker of FCM for the amount needed to cover the necesarry additional margin. Specify that the bank can only pay for the amounts that YOU lose in YOUR account. If the broker or FCM goes broke your losses will be limited. Losses from other traders causing companies to close down will not be paid by you. At least not if they exceed the absolute minimum in your account that you will lose anyway. You should do enough volume of course, because trading a few contracts a day will not impress your broker. Or a few traders should organize a global demand to put pressure on brokers or FCM's by offering big volumes. Let the competition play!!!
 
J.P. said:
I used to do that with an Interactive Brokers account but then they invented the "exposure fees" and now that tactic is costly.
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You should ask IB an exposure fee for the risks you take too. What if THEY go broke????
 
onemoreshot said:
Yeah Amp advertises $400 margins for ES and I believe if you agree to pay a higher commission they will even give you $300 margins.
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This is the problem with the industry. Firms like AMP and Ninja (I will probably be banned for saying something negative about a sponsor) who offer $500 or less margins are doing it for one reason. That reason is very simple to get you to trade more.

If you have $10,000 in your account at IB you need $2000 just to place a trade, then they have real time risk in terms of both maintenance and overnight margin. IB is legit. At AMP or Ninja, if you have $10,000 you can put on 20 contracts, $10,000/$500. So if the ES is at say 2000, you can trade $2m worth of stock with $10k in you account or 200 to 1 leverage. Why do they do this. Well for $0.53. So for every contract you trade they make $0.53 revenue. The more you trade the more they make. Go ahead, blow yourself up, they make $0.53 per contract.
 
CliffordHarris said:
This is the problem with the industry. Firms like AMP and Ninja (I will probably be banned for saying something negative about a sponsor) who offer $500 or less margins are doing it for one reason. That reason is very simple to get you to trade more.

If you have $10,000 in your account at IB you need $2000 just to place a trade, then they have real time risk in terms of both maintenance and overnight margin. IB is legit. At AMP or Ninja, if you have $10,000 you can put on 20 contracts, $10,000/$500. So if the ES is at say 2000, you can trade $2m worth of stock with $10k in you account or 200 to 1 leverage. Why do they do this. Well for $0.53. So for every contract you trade they make $0.53 revenue. The more you trade the more they make. Go ahead, blow yourself up, they make $0.53 per contract.
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And what about the protection for clients against IB or others blowing up? We saw last weeks that this is also reality. Or is protection only important for brokers? If they ask me $2,000 for 1 contract that's not a problem, but I want security too. Or maybe they don't care about clients as long as they make money on the back of clients? Protection should work both ways. IB lost huge on a few clients too, so apparently they don't ask the same $2,000 margin to all clients. Some appear to have a special status. Or they took there also risc for $0.53 per contract?
 
CliffordHarris said:
At AMP or Ninja, if you have $10,000 you can put on 20 contracts, $10,000/$500. So if the ES is at say 2000, you can trade $2m worth of stock with $10k in you account or 200 to 1 leverage. Why do they do this. Well for $0.53. So for every contract you trade they make $0.53 revenue. The more you trade the more they make. Go ahead, blow yourself up, they make $0.53 per contract.
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I always figured the low margin guys were competing for B list clients. Those brokers don't really want my biz. `Course, now I see a reason profitable traders would like low margins for futures.

Maybe it's best to either find a broker with really deep pockets like one of the banks or at least one that doesn't do Forex.
 
Doesn't IB (and many other brokers), sweep money from the insured equities account, to a special futures account, only as you need it? How does it work? Do they just sweep the margin you need at the moment, and those are the only funds that are uninsured?
 
Watch here who has which obligations concerning clients deposits:
http://www.cftc.gov/MarketReports/FinancialDataforFCMs/index.htm

If you are afraid for forex losses from others, look who has a lot of forex clients and choose another broker. Most vulnerable according to this list and who has the biggest forex obligations:
FOREX CAPITAL MARKETS LLC
OANDA CORPORATION
GAIN CAPITAL GROUP LLC
IBFX INC
INTERACTIVE BROKERS LLC
KCG AMERICAS LLC
MB TRADING FUTURES INC
RJ OBRIEN ASSOCIATES LLC
INSTITUTIONAL LIQUIDITY LLC
 
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