amen to that. An FCM that makes 50c in commission on 1000 round trips = $1000 is not going to waive $500 in platform costs. aint happening. Maybe at 5000 round trips.
Platforms with ZERO charge (or very low charge) that allow you to trade exchange spreads
- Thread starter propwarrior
- Start date
amen to that. An FCM that makes 50c in commission on 1000 round trips = $1000 is not going to waive $500 in platform costs. aint happening. Maybe at 5000 round trips.
yep you nailed it. A few posters read the OP and answered with helpful suggestions. The resident course salesman and firm owner then dog piled on with their own agenda. you called it.
You can negotiate commission with IB given you do sufficient volume and are on boarded their institutional platform. Just saying there are choices out there, choices where the frontend is guaranteed to be free, not maybe, possibly, perhaps...
Please quote a spread where IB requires 20k margin and another FCM who advertises here asks for 400 dollar margin. Interested to hear...
I think that CTS T4 is the only platform doing this, I use them and I trade mainly spreads and flies (on Eurodollar) and can definitely confirm that one fly is 50 cents and not 2$. There are 2 fees, the commissions paid to the FCM and the routing paid to CTS, the 50 cents is only for the routing, you still have to pay the commissions/clearing/nfa per lot to the FCM (unfortunately).
Thanks, I will give another try to the firetip basic. I might consider switching to DDT as this would be some big savings!
You're coming off as arguing for arguing's sake here. Look, here is paraphrased version of how the conversation went:
bone: Ensure you use a FCM that appropriately margins the spread per what the exchange dictates and does not margin each leg independently.
i960: Yes, this is a problem and something to look out for when using some brokers.
zzzz1: Hey guys that's a dumb thing to ask for because it's risky and you should feel safer with IB [which implies IB actually does this].
i960: IB margins spreads as the exchange dictates anyways so they're not even a broker we're talking about (except they have issues with margins on spreads further out and VX futures).
zzzz1: Please show me where IB wrongly margins.
Here you go:
CLZ18:Z19:Z20:
CLZ18:Z19:
It's quite apparent IB has disabled the appropriate initial margin calculation on these further out contracts as the maintenance margin is roughly correct (with what looks like an additional +25%). So a dec/dec/dec fly which normally requires 182/165 USD ends up requiring 15200USD just to put on - but then ends up with a maintenance margin of 200. 8200USD to put on a dec/dec cal when the exchange requires 484/440? Clearly not right.
This is also not the first time this particular issue has come up with IB: https://www.elitetrader.com/et/threads/double-butterfly-spread.293675/page-11#post-4260303
The reality is that they *do* have issues margining spreads further out on the curve due to their own explicit decisions (they're trying to make it harder to trade further out most likely based on a belief there's scary things lurking out there) whereas both CME and ICE have no issues with this nor do other spread-aware FCMs. The "20k" figure was a reference to brokers margining up each leg additively (of which there are 4 in a fly) and using that as the margin for the spread which is insanely wrong. Even IB doesn't do this.
Realistically people were implicitly referring to brokers like TDA, Tradestation, etc in that while they may offer futures and futures spreads they'll most likely not handle margins correctly. Ironically I just checked a TDA account and to put on that dec/dec/dec fly it would be 5000$ initial (which is still wrong, but not 15200$ wrong like IB).
What you are describing is an incident with IB not IB's normal margin in practice. You found an issue and hopefully brought it up with IB. Nothing to be seen here, move on folks.
Secondly, you are comparing apples with oranges here. You can't compare the risk management between a broker and an exchange. The exchange virtually runs no credit risk, they are guaranteed payment by the clearer. A brokerage runs tons of credit risk, every single day. There is a reason IB has been in this business for so long and hardly ever had a major credit event or issue that threatened the survival of the company. The same can clearly not been said about the host of FCMs and other brokers who come and go on almost a daily basis. I as long term IB client appreciate their business practices. In fact my calls are promptly answered, their customer service helps to resolve issues and has so far mostly been courteous to my inquiries. Margening has never been a problem, I run very prudent risk and it has always suited me well. Does IB at times have issues? Yes like everyone else. I don't see the issues you are bringing up here. Every business makes their own business decisions and further out the curve trades have never been an issue on this thread until you brought them up. Perhaps raise those issues in a separate thread?
By the way I strongly assume you discuss IB's practices all in the context of their portfolio Margening with account balances above 100k correct?
In summary I don't get your point, are you trying to say strictly in the context of this thread that shops that calculate margins in a way more favorable to your way of running your business deserve to be paid an extra 500 dollars a month for platform access? I am afraid you are missing the entire point of this thread. It's on platform fees to execute spreads.
Secondly, you are comparing apples with oranges here. You can't compare the risk management between a broker and an exchange. The exchange virtually runs no credit risk, they are guaranteed payment by the clearer. A brokerage runs tons of credit risk, every single day. There is a reason IB has been in this business for so long and hardly ever had a major credit event or issue that threatened the survival of the company. The same can clearly not been said about the host of FCMs and other brokers who come and go on almost a daily basis. I as long term IB client appreciate their business practices. In fact my calls are promptly answered, their customer service helps to resolve issues and has so far mostly been courteous to my inquiries. Margening has never been a problem, I run very prudent risk and it has always suited me well. Does IB at times have issues? Yes like everyone else. I don't see the issues you are bringing up here. Every business makes their own business decisions and further out the curve trades have never been an issue on this thread until you brought them up. Perhaps raise those issues in a separate thread?
By the way I strongly assume you discuss IB's practices all in the context of their portfolio Margening with account balances above 100k correct?
In summary I don't get your point, are you trying to say strictly in the context of this thread that shops that calculate margins in a way more favorable to your way of running your business deserve to be paid an extra 500 dollars a month for platform access? I am afraid you are missing the entire point of this thread. It's on platform fees to execute spreads.
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I'm just going to ignore all your IB fanboy stuff and focus on the above. The entire point of this thread is about platforms yes, which is where TWS came up. The OP trades energies, I gave him clear examples of where he'll get pissed off using IB/TWS for this. You're the guy who's been hyperfocused on IB-this, IB-that, I was simply showing you one of the major issues they have because you specifically asked about it. You're asking here if someone should pay for a platform to use an FCM that will margin his spreads correctly... should he *have* to pay 500$/month? No. Should he find the cheapest (but still competent) option that will allow him the correct margins? Yes. Should he choose software that won't piss him off or otherwise make his life difficult? Yes. Is it possible there might *not* be an option that meets "don't piss me off" and "don't charge me a lot" overlap zone? Yes - which is why there might not be any great option here.
OP has already mentioned Firetip Basic/Pro multiple times now so it seems like his mind is already made up anyway.
Thanks for quoting a spread that supported your margin claims, I do honestly appreciate that. And I agree with you that if someone wants to engage in far out the curve spreads then IB is not suited for this line of business. I am not an IB fan boy, but I believe they have a rock solid platform, it just is pretty complex and many people do not fully understand it. IB makes business decisions that may differ from other shops, no question. And you rightly pointed out if a specific business need is not supported by an FCM/Broker then one should look elsewhere. I simply added my weight in claiming that TWS is a decent solution for someone who does not trade far out the curve spreads and does not mind the otherwise slightly higher initial margin requirements (even for spot currencies, IB charges 5.6k usd initial margin for each 100k traded in EURUSD, which is unusually high).
I stand behind each of my earlier posts in that I refused to swallow a lot of the verbiage that was sprayed around in that clients should almost feel privileged to pay "only" 500 bucks a month for buy and sell click-joy. The problem is that there are too many naive newbies out there who feel $200 ES margins and the like, some FCMs offer, are the new found way to print coin while omitting they get fleeced on value-added(not) fees.
Your points are all taken in good spirit and mostly valid.
I stand behind each of my earlier posts in that I refused to swallow a lot of the verbiage that was sprayed around in that clients should almost feel privileged to pay "only" 500 bucks a month for buy and sell click-joy. The problem is that there are too many naive newbies out there who feel $200 ES margins and the like, some FCMs offer, are the new found way to print coin while omitting they get fleeced on value-added(not) fees.
Your points are all taken in good spirit and mostly valid.