Question about openning an Investment Bank Account To Trade.

S

shewenhao

Dear All Guru,


Thank you for reading my thread at first.

My question is triggerred by the nice thread HFT_Myths. The professional who started the thread mentioned that the ultimate trading account for individual would be a client account in big investment bank like jpmorgan, ubs or GS. He also said that he currently trade one hand furture contract by paying commission fee around 0.03~0.05USD/round. I am quite amazed by this number since currently I am trading on IB which charge 5 USD/round per hand. Certainly, I understand that the HFT_Myths is doing HFT and of course he should enjoy such low commission.

I am just wondering, is here any one having exeperiences on openning account in those investment banks and trading with satisfication now?

what is the requirement to open such an account. Of course, it is all about money. IB require 25000, what is their requirement? Certainly, I will not trade like hft fund for a long time then what type of commission structure they prefer to offer?



Thanks in advance~~
 
IMHO if you're trading your own money there's very little upside going with a prime broker. The only real upside I personally see is they can make introductions for fundraising, marketing (it adds an air of legitimacy), and securities lending.

Last time I checked GS had a min of 30 bucks, but this was years ago.
 
Quote from shewenhao:

Dear All Guru,


Thank you for reading my thread at first.

My question is triggerred by the nice thread HFT_Myths. The professional who started the thread mentioned that the ultimate trading account for individual would be a client account in big investment bank like jpmorgan, ubs or GS. He also said that he currently trade one hand furture contract by paying commission fee around 0.03~0.05USD/round. I am quite amazed by this number since currently I am trading on IB which charge 5 USD/round per hand. Certainly, I understand that the HFT_Myths is doing HFT and of course he should enjoy such low commission.

I am just wondering, is here any one having exeperiences on openning account in those investment banks and trading with satisfication now?

what is the requirement to open such an account. Of course, it is all about money. IB require 25000, what is their requirement? Certainly, I will not trade like hft fund for a long time then what type of commission structure they prefer to offer?



Thanks in advance~~
More...

IB's US futures commissions are not 5 USD round turn.

IB's US futures commissions start at 85 US cents per side and drop to 25 US cents per side after 20,000 contract sides. The bulk of what you pay to trade futures is the exchange fee, not the IB commission. IB also gives a free trading platform and API.

If you want low futures commissions you have to do volume every month and pay for a platform. Advantage futures drops to 19 US cents per side after 5,000 sides and 7 US cents per side after 10,000 sides. To negotiate futures commissions 5 US cents per side and lower you need to be doing over 50,000 sides per month.

To reduce exchange fees you have to buy or lease an exchange seat. For ES the public pays 1.14 USD a side in exchange fees, a leasee pays 46 US cents per side and a seat owner pays 34.5 US cents per side. Members also get Globex fee rebates for doing average daily volume over 150 sides a day.

If you plan on doing futures HFT or any other high volume trading you want to use a Chicago clearing firm such as Advantage Futures not a "big investment bank like jpmorgan, ubs or GS". Advantage Futures has much lower account requirements than the multimillion USD required for the big investment banks.
 
Many of my clients clear Advantage, some clear Rosenthal Collins Group or Kotke or one of the many other traditional Chicago firms.

Some still clear IB because they want more of an "omnibus" type account which allows them to trade equities, futures, options, forex, from the same account. They used to complain about how IB margined futures spread positions, but I do not know if that is still an issue.

I do have a few clients with several million dollar accounts at IB's. They have access to products that the rest of us mere mortals do not.
 
Quote from jeb9999:

IB's US futures commissions are not 5 USD round turn.

IB's US futures commissions start at 85 US cents per side and drop to 25 US cents per side after 20,000 contract sides. The bulk of what you pay to trade futures is the exchange fee, not the IB commission. IB also gives a free trading platform and API.

If you want low futures commissions you have to do volume every month and pay for a platform. Advantage futures drops to 19 US cents per side after 5,000 sides and 7 US cents per side after 10,000 sides. To negotiate futures commissions 5 US cents per side and lower you need to be doing over 50,000 sides per month.

To reduce exchange fees you have to buy or lease an exchange seat. For ES the public pays 1.14 USD a side in exchange fees, a leasee pays 46 US cents per side and a seat owner pays 34.5 US cents per side. Members also get Globex fee rebates for doing average daily volume over 150 sides a day.

If you plan on doing futures HFT or any other high volume trading you want to use a Chicago clearing firm such as Advantage Futures not a "big investment bank like jpmorgan, ubs or GS". Advantage Futures has much lower account requirements than the multimillion USD required for the big investment banks.
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Very good info. Thanks.
 
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