IB or Cybertrader for E Minis?
- Thread starter Dominic
- Start date
you're right. They don't. That Performance bond per contract fee is not an overnight fee. That is an intraday fee. 1,969.00 per contract. Daytrading only. Most emini daytraders don't hold overnight anyways. They d-a-y-t-r-a-d-e the emini's. Sell before the trading day ends. Because they dont' allow overnight holding of futures positions is another reason not to sign up with cybertrader. Performance bond fee's(margins) too high at 1,969.00 per contract and no overnight emini futures account holding.
No I don't. It's Saturday and I'm bored.
goodfellow,
it is disappointing to see somebody give out so much misinformation to people who might some day be harmed by it. Osorico's link has nothing to do with E-mini contracts or futures contracts. His link deals with securities futures contracts, which are not the same thing as the futures contracts covered by our discussion. He has already admitted that I am correct on this point. It seems that on top of all the other misinformation you have been spewing, you also lack the ability to admit that you made a mistake.
No, I don't work for IB. I am a retail customer of IB. IB does many things right, which most other brokers do not do right. I think that smart customers need to praise IB publicly, and to defend it against unfair criticism, in order to help encourage IB to continue doing things right, instead of allowing itself to descend into the same mediocrity as most of the rest of the industry.
I no longer trade ES, but I am about to test an equity trading strategy which will be using ES charts and quotes. I have traded ES in the past.
I currently use QuoteTracker charts, hooked to IB's datafeed, and I also make some limited use of IB's own charts.
Tradestation 2000i also works with IB data and this has been my choice.
I've spent to much time on JimRockford's segregated funds challenge. At this time, (Saturday nite w/a couple o brews down, prepping to go to the movies) I am admitting defeat.
It seems that over the last 2 years or so, I have mistakenly taken the SECURITY futures risk disclosure and customer protections as gospel for COMMODITY futures. This is a mistake on my part.
However it definitely justifies my account strategy of...
1) check financials of clearing firm before opening account http://www.cftc.gov/tm/tmfcm.htm
2) check compliance of brokerage and/or clearing firm before opening account http://www.nfa.futures.org/basicnet/
3) Prefer GUARANTEED IB over IB over self-clearing.
4) Sweep accounts regularly.
5) Back-up accounts and/or accounts used for specific trading purposes/strategies are to be opened with high preference given to clearing firm/brokerage diversification.
Thanks for pointing out this important, but not particularly frightening to my account arrangements, oversight on my behalf.
Osorico
It seems that over the last 2 years or so, I have mistakenly taken the SECURITY futures risk disclosure and customer protections as gospel for COMMODITY futures. This is a mistake on my part.
However it definitely justifies my account strategy of...
1) check financials of clearing firm before opening account http://www.cftc.gov/tm/tmfcm.htm
2) check compliance of brokerage and/or clearing firm before opening account http://www.nfa.futures.org/basicnet/
3) Prefer GUARANTEED IB over IB over self-clearing.
4) Sweep accounts regularly.
5) Back-up accounts and/or accounts used for specific trading purposes/strategies are to be opened with high preference given to clearing firm/brokerage diversification.
Thanks for pointing out this important, but not particularly frightening to my account arrangements, oversight on my behalf.
Osorico
Jimrockford, I fully agree with most of your comments regarding the credit risk associated with accounts at FCM's. It was amazing during the Refco debacle to realize how many people who believed that they had no exposure because their margin at Refco was held in Tbills.
However, your comment, quoted above, regarding the reduction in credit exposure from using IB was incomplete in an important respect and could be misleading as a result.
I agree that IB's structure reduces the amount of credit exposure as compared to most futures accounts. However, this reduction may be *very small* for many people depending on the positions in the account.
In order to illustrate, I will use the terms "required futures margin" to mean the amount which required to be held in your futures account to support your futures positions, and "excess margin" to mean the amount which is surplus and could be withdrawn from your account. Few people are willing to transfer funds in and out of their futures account daily, so most people maintain some excess margin in their futures account.
At most futures brokers, this distinction is unimportant since both of these amounts are held in your futures account (either in cash or bills) and are then subject to the segregated funds regime and credit risk you described earlier. In a bankruptcy caused by a customer loss, the entire amount would be subject to a prorata credit loss.
At IB, by contrast, their computer system *automatically* transfers amounts in and out so that *only* the required futures margin is held in the futures account. It is important to recognize that the required futures margin is subject to credit risk in the same manner as with any other futures broker.
The benefit of the IB structure is that without any work by the customer, the "excess margin" is always held in the securities account and is covered by SIPC. A customer who has no excess margin will experience *no* reduction in credit exposure.
Suppose, for example, that you have 500k in tbills and have 400k of required futures margin. (At IB this would be in a securities account with 500k bills and a 400k margin loan, and a futures account with 400k in cash.) Suppose further that your futures broker (IB or some other broker) is bankrupt as a result of a giant customer loss.
At a typical broker, you would lose some portion of the 500k prorata with other customers. At IB you would lose some prorata portion of 400k. At IB, the 100k of equity in your securities account would be fully protected by SIPC. If the recovery rate were 0%, customers at IB would lose only 400k while those elsewhere would lose 500k.
After reading your comment I couldn't tell whether you understood that you would lose 400k in this example, or whether you were under the impression that you would somehow lose nothing.
One further note: although IB's structure reduces credit risk, it provides significantly less economic benefit from using tbills than does a typical futures account. In my example above, the trader is incurring the negative spread between the interest rate on the bills and the margin loan at IB. The trader should eliminate this by selling 400k of the bills. At most futures brokers, there wouldn't be any negative spread since the bills would directly be used as margin.