Futures Brokerage - does it matter where?

V

Vortexed

Hello all!

We are from a long-standing FX fund management background, dating back to 1998. We have found over the years that it most certainly matters where you trade to reduce slippage on large volumes. In this case the large tier-one banks are usually better.

But here is my question. In the futures market, does it matter at all which broker you use? The difference with FX is that there is an actual formal exchange for the futures instruments. Does it matter if you go to either IB or NewEdge? Surely they (should) both fill your order at the same level / slippage / even in large volume?

My focus here is specifically fills on large volumes, I am not interested in soft issues like client service, etc.

Any advice will be greatly appreciated.

:)
 
Quote from Etienne Botes:

Hello all!

We are from a long-standing FX fund management background, dating back to 1998. We have found over the years that it most certainly matters where you trade to reduce slippage on large volumes. In this case the large tier-one banks are usually better.

But here is my question. In the futures market, does it matter at all which broker you use? The difference with FX is that there is an actual formal exchange for the futures instruments. Does it matter if you go to either IB or NewEdge? Surely they (should) both fill your order at the same level / slippage / even in large volume?

My focus here is specifically fills on large volumes, I am not interested in soft issues like client service, etc.

Any advice will be greatly appreciated.

:)
More...

Once an order gets to Globex, it does not matter how it got there.

Of course some firms offer their own algorithms etc. for filling large orders that others do not - for example, monitoring the market and sending them to Globex a little at a time.

Also, margins differ, as do order placement capabilities - some firms will let you place orders that the exchange does not accept, such as GTC orders on some exchanges.

Some firms do not accept all of the order types that the exchange accepts, such as certain spreads, especially user defined spreads.

Some firms will let you keep positions closer to expiration than others.

Oh and one firm will liquidate your positions with next to no notice if margin falls below its calculated levels intraday.
 
Thank you, Comintel.

Our approach require a fill at a specific price-level, which is in the direction of the anticipated move. I guess in that instance, it must be pretty much the same.

May I ask for a recommendation from members here of a few trusted futures brokers? We know IB quite well, and we do like them, I recently was also approached by R.J O'Brien, they also seem very good although we have no experience with them. However, they did mention the possibility of "capital introductions".
Is this a ploy to attract funds, or does this actually happen? Who else promises this?

Thanks again for the feedback.
 
Quote from Etienne Botes:

Hello all!

We are from a long-standing FX fund management background, dating back to 1998. We have found over the years that it most certainly matters where you trade to reduce slippage on large volumes. In this case the large tier-one banks are usually better.

But here is my question. In the futures market, does it matter at all which broker you use? The difference with FX is that there is an actual formal exchange for the futures instruments. Does it matter if you go to either IB or NewEdge? Surely they (should) both fill your order at the same level / slippage / even in large volume?

My focus here is specifically fills on large volumes, I am not interested in soft issues like client service, etc.

Any advice will be greatly appreciated.

:)
More...

Rates are very commoditized, so it matters less.

However, I would recommend you go with a CLEARING FCM rather than a NON-CLEARING FCM.

Your interface will likely be TT X Trader, CTS T4 or CQG. Personally, I like T4.

Once your order is on GLOBEX it really didn't matter how it got there. If you're a bigger group you probably want a balance sheet, so you'd be looking more for an ABN Amro or Macquarie, over a Crossland or Dorman.

I prefer the smaller, privately owned FCMs like the aforementioned, but I'm big on trust and personal service.

Brokers will quote you in dollars/cents per side, plus fees. Fees will be standard across brokers.

GL! PM me if you need more info.
 
Thank you Chicago_CTA!

I appreciate the input. I will very likely ask you for some more advice in due time.

All the best,
Etienne
 
like Chicago_CTA said, Clearing FCM is best... however, I would be wary of any FCM that is not properly capitalized with a lot of excess funds and that is unable to provide a clear picture as to where their segregated funds are being kept.... to me, that is more important... personally... I like crossland, IB, and FCStone... but that is just me...
 
Thank you, Ofthomas.

I am glad to hear that about IB.

Do any one of you have any knowledge if DB is any good? Most importantly, do they offer managed accounts and if so, do they require a massive minimum account size?

Thanks for all the input, much appreciated.
 
Global futures has been great. At first I had a couple bumps with them. They tried to raise commissions. But they fixed that for me. They have a low opening balance which I like because I like to spread my money around. So far I plan to stick with them.
 
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