Tradovate's new worse pricing model
- Thread starter CALLumbus
- Start date
Lukas, I would say no, one has not to be concerned about this. You have to compare apples with apples. Sure AMP has way less net capital than a large FCM like IB or Advantage Futures. But you also have to look at the business they make, the clients they have. I would say that AMP has mostly retail traders as clients, who want to do mostly intraday trading, without positions overnight. They trade mostly liquid basic stuff like ES and CL. So there is a very clearly defined risk profile here, they know what they deal with and back it up with an adequate amount of capital.
A big ass FCM/broker like IB is a completly different story. They have not only small retailers as their clients, but huge traders, hedge funds, pension funds and I dont know what else. They do not only trade in futures, but in all types of assets all around the world, stocks, FX, bonds... There is no strategy their clients are not involved to: outrights, spreading, overnights, arbitrage,... So with all those different clients, crazy huge amount of deposits involved, all these different asset classes and strategies all around the world, including spreading, overnights, long term positons and prop trading, of course the risk of a broker like IB is much much much (MUCH) higher than that of a small futures only broker that is focused on intraday retail traders. So the amount of capital they need to backup their business is of course from another world compared to a small FCM like AMP or Transact.
With that being said, one should never forget that there is no guarantee. Anything can happen anytime, be it with a big broker or a small FCM. The past has shown this several times. So be careful, do not put all your eggs in one basket, only keep as much in your margin account as you really need and always have a backup plan/ broker.
You can always buy a Treasury in your name with your full account balance and then margin it to trade if you're concerned. It costs a tiny bit to do that, but you're essentially un-impacted by potential failure of the FCM and can choose based on service and price vice failure risk which may be worth it for you depending on what you value.
Currently, Tradovate is $4.16 RT "all in" for no membership with their free charts.