How to pick a futures broker?

U

usedtowork

I'm currently with IB and as I've gradually made higher and consistent profits trading futures instead of equities, I'm thinking it might be time to open an account with a dedicated futures broker to release a lot of my capital currently tied up in IB's margin requirements (for example, IB requires $2,813 initial margin for ES while many futures brokers require only $500).

However I don't know what else to look for in a futures broker besides low margins. I currently trade between 500 and 1,000 roundtrips per week, mostly financials and energy, using ZeroLineTrader with IB. From a software perspective I'm not looking for anything fancy although automatic stops and profit targets ala NinjaTrader/ZeroLineTrader would be nice. I understand picking a broker with a good clearing house is important but I don't know exactly what to look for here.

Finally, from searching other threads and reviews, it seems like Mirus and Velocity might be good choices based on the above criteria and my current trading needs, are these considered the "gold standard" in futures brokers, and can I skip to the chase and go with one of those since I don't have any unique trading needs?

Any advice or recommendations would be appreciated, thanks very much!
 
Infinity and Global futures are two others worth looking at. Global seems to be the most competitive with commissions. Pin them against each other and see who offers the best rates. They all tend to clear through the same firms. RCG and RJO are popular ones.
 
Thanks, I looked at Global but saw that they require $1,000 in initial margin for ES if you trade more than 50 contracts (and even more if you trade more than 100 contracts), which means I'll have to tie up twice as much money in my futures account as say Mirus which only requires $500 initial margin for ES no matter what the trade size.

That said I'm trading more bond futures and less ES these days so I'll give Global a more thorough look.
 
Quote from usedtowork:

Thanks, I looked at Global but saw that they require $1,000 in initial margin for ES if you trade more than 50 contracts (and even more if you trade more than 100 contracts), which means I'll have to tie up twice as much money in my futures account as say Mirus which only requires $500 initial margin for ES no matter what the trade size.

That said I'm trading more bond futures and less ES these days so I'll give Global a more thorough look.
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$500 a contract for a 100 lot or larger in ES !!!

I would run away from any broker or clearing firm so greedy for commissions that they would allow such absurd trades to take place. :eek: :eek: :eek:
 
Quote from jeb9999:

$500 a contract for a 100 lot or larger in ES !!!

I would run away from any broker or clearing firm so greedy for commissions that they would allow such absurd trades to take place. :eek: :eek: :eek:
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+1. The OP is searcing for the smallest possible margin.

The idea of $300 controlling $50,000 (value of emini ES at 1,000) is completely ludicrous. And holding 100 lots???

Keep exposing yourself like this, and you will get hit unexpectedly, someday. A smart trader knows capital preservation comes 1st, 2nd, and maybe 3rd... BEFORE profit seeking.

One whiff of a rumour like "dirty bomb detonated in Tokyo." or "Iran completes nuclear bomb" or "terrorists get hands on Pakistani bomb" etc. etc...

...and this "trader" is going to be filing for bankruptcy, although I think trading losses cannot be bankrupted away...
 
Quote from jeb9999:


I would run away from any broker or clearing firm so greedy for commissions that they would allow such absurd trades to take place.
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Like Global, Mirus or Velocity? :confused:

Quote from TraderZones:


The idea of $300 controlling $50,000 (value of emini ES at 1,000) is completely ludicrous.
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I don't mind the derail, what amount of leverage for the ES would you consider reasonable and why?
 
Quote from usedtowork:

Like Global, Mirus or Velocity? :confused:


I don't mind the derail, what amount of leverage for the ES would you consider reasonable and why?
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longterm? The best model I saw said that 7-fold leverage was the sweet spot between risk and reward.

In other words, a single emini contract, like ES being worth about $50,000 at a price level of 1,000, you would use about $7,000 margin. I do not recommend or disrecommend this level. It was an interesting article that pumped in a lot of different levels and made a nice risk-reward curve, assuming a profitable system.

People who use $500 margin regularly have a nice name "Road Kill." But your brokers love you until you blow out.
 
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