User-Defined Exchange Traded Option Strategies - CQG v. CityTrader, ADM versus Wedbush

C

comintel

I have a TradeStation FuturesPlus (aka CityTrader white label) account. Being able to build and place user-defined exchange traded option spreads using greeks criteria is crucial and works well, but I am looking for something a little cheaper if it would not have other problems.

It is a not a large account and the only two low-cost alternatives I see are either CityTrader or CQG QTrader.

Right now, Optimus looks attractive because they have all of:
- 50 cent commissions (I assume with no charge for legs expiring worthless)
- CQG QTrader via Wedbush
- CityTrader via Wedbush, ADM or AMP

Which if any of these would match TradeStation CityTrader in totally avoiding the needing to pre-specify markets I want to trade and number of contracts I want to trade for risk control purposes. TradeStation CityTrader is totally based on SPAN margin and I can just trade anything. I like to have it that way.

(I also have a CTS T4 account elsewhere, and while they do allow me to trade anything anytime, it is a slight hassle that T4 risk control issues periodically come up. They have to set leg count limits in T4, by underlying, that are completely meaningless because I am trading spreads not outright legs and keep risk extremely low. I would rather they used dynamic span margin).

So how would QTrader on ADM or Wedbush or AMP compare in terms of risk control nuisance? I see a couple of posts in other threads from people who said they had unnecessary risk block nuisances on WedBush. Would CityTrader on Wedbush be different from QTrader on Wedbush?

Also would QTrader have more markets available on ADM or or Wedbush?

Also do these firms allow trading on delayed data (eg. ICE markets)? CTS T4 does and so do some others I believe. Some of my trades are GTC limit orders and do not need live data.

I am open to look at other brokers as well, not just Optimus, and other software too, if there are other good choices. Al I really need that is special is UDS spread composition and submittal. Hmm, I suppose I could possibly just use CME Direct. Will Optimus allow use of CME Direct?

Thanks.
 
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We introduce to Wedbush. On every platfrom except Realtick (No Options or VX), you have to request Max Order Size/Max Position Size for risk but margin overnight is SPAN. Qtrader and CTS T4 are the most popular option platforms. CME Direct, which I use, is the only one that offer RFQ where you can place almost any CME option spreads you want. CME Direct is also free but is very bad at tracking positions, P/L or greeks. You would have to use a spreadsheet or a third party risk/margin platfrom we offer called Object+ ($100/month). Object plus offers live equity, P/L, greeks, begin of day margin, current margin etc. CME Direct + OBject plus is great unless you need charting. CME charts are very simple and there are no conditional orders yet expect time.

Give me a call later if you need more information.
 
comintel said:
I have a TradeStation FuturesPlus (aka CityTrader white label) account. Being able to build and place user-defined exchange traded option spreads using greeks criteria is crucial and works well, but I am looking for something a little cheaper if it would not have other problems.

It is a not a large account and the only two low-cost alternatives I see are either CityTrader or CQG QTrader.

Right now, Optimus looks attractive because they have all of:
- 50 cent commissions (I assume with no charge for legs expiring worthless)
- CQG QTrader via Wedbush
- CityTrader via Wedbush, ADM or AMP

Which if any of these would match TradeStation CityTrader in totally avoiding the needing to pre-specify markets I want to trade and number of contracts I want to trade for risk control purposes. TradeStation CityTrader is totally based on SPAN margin and I can just trade anything. I like to have it that way.

(I also have a CTS T4 account elsewhere, and while they do allow me to trade anything anytime, it is a slight hassle that T4 risk control issues periodically come up. They have to set leg count limits in T4, by underlying, that are completely meaningless because I am trading spreads not outright legs and keep risk extremely low. I would rather they used dynamic span margin).

So how would QTrader on ADM or Wedbush or AMP compare in terms of risk control nuisance? I see a couple of posts in other threads from people who said they had unnecessary risk block nuisances on WedBush. Would CityTrader on Wedbush be different from QTrader on Wedbush?

Also would QTrader have more markets available on ADM or or Wedbush?

Also do these firms allow trading on delayed data (eg. ICE markets)? CTS T4 does and so do some others I believe. Some of my trades are GTC limit orders and do not need live data.

I am open to look at other brokers as well, not just Optimus, and other software too, if there are other good choices. Al I really need that is special is UDS spread composition and submittal. Hmm, I suppose I could possibly just use CME Direct. Will Optimus allow use of CME Direct?

Thanks.
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Thank you for considering us. We appreciate it.

Essentially there would be no differences between on software and another in terms of functionality between one FCM and another. However, they could restrict you in terms of margin depending on the strategies you wish to employ, naked, spread, etc. We could help you find the right software, and save you as much as we can based on your trading criteria, risk capital, etc. CME Direct may or may or may not be the right platform for you, but we can supply it if necessary. I encourage you to call us or email us. The contact is below.
 
Thanks for the feedback!

I am tempted to go with CME Direct to minimize costs. I am modelling the trades in my own analysis platform anyway and do not necessarily need to do that in the trading platform to any depth.

However, I would like to also trade Coffee options, Sugar Options etc. on ICE. I have done so in the past. I know they are less liquid. These would be longer-term spreads.

Would ADM and/or Wedbush allow using BOTH WebICE AND CME Direct in the same account with a common margin pool?

Do both allow trading on delayed quotes for ICE (I suppose they do not even know necessarily how you derived your order limit price)?

By the way, one footnote on an unrelated point that came up, CQG QTrader does now allow you to create exchange-traded user-defined strategies. http://help.cqg.com/qtrader/#!Documents/udsontheexchanges.htm
That is fairly new I think - CQG used to restrict it to the Integrated Client I believe.

On another footnote, CTS T4 (which I use now) does NOT allow you to create user defined strategies (except with the extremely expensive OptionsPro addon) or even issue RFQ's. You can however trade them in T4 if you create them first elsewhere in some other account. I create them on OptionsCity CityTrader and then they show up instantly in T4. If you are really desperate you can phone them in to the exchange - I used to have to do that.

I am still confused as to whether IB now allows creating arbitrary User Defined Strategies and submitting and trading them directly on CME. My spreads are complex butterflies etc. and others that are unlikely to already exist on the exchange. They usually do not exist until I create them with CityTrader. I have the impression that IB does NOT necessarily allow creating any totally arbitrary spread on the exchange if you submit them via its builder and direct routing. Or do they now? They used to allow only fairly simple combinations as I recall. Maybe I can try out their demo and tell from that.

Thanks for any comments.
 
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comintel said:
I am tempted to go with CME Direct to minimize costs. I am modelling the trades in my own analysis platform anyway and do not necessarily need to do that in the trading platform to any depth.
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Q2 2018, CME Direct will start charging Pro market data fees on their software with the possibility of getting a credit for volume. That will cost $105/CME exchange. They decided to target less retail traders and more institutional. Too bad. http://www.cmegroup.com/trading/cme-direct.html

comintel said:
Would ADM and/or Wedbush allow using BOTH WebICE AND CME Direct in the same account with a common margin pool?
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ADM is not a good choice for a small retail account. They have a free platfrom called OAK, but they charge high commissions for smaller account vs other FCMs. They cater to larger accounts that want their balance sheet. We introduce to Wedbush. With permission from Wedbush, this is possible because neither WebICE or CME Direct are margin based. The FCM sets risk with a limit of Max order size and Max position size.

Bob
 
Matt,

I think you have a broader selection of Platforms and Clearing Brokers than anyone else at https://optimusfutures.com/Platform-Pricing.php.

I see you have several Tradestation Platforms and Tradestation Clearing listed. Is there any chance you could add the TradeStation Options+ platform as well, which is their white label of OptionsCity CityTrader? I know that you have CityTrader already through Wedbush, but I have a feeling that the Tradestation version could be offered at lower cost, because they charge no fees (!) under special offers to their own customers to use it (no routing fee, no platform fee) with commissions as low as 45 cents.
https://www.tradestation.com/promo/tradestationsalutes/
"A $0.45 per contract fee will apply for unbundled futures/futures options contract."
I realize that their normal commission in other offers of this platform is $0.65 (IRA), $1.20 (tiered) or $1.50 (standard) including platform and routing, but the fact that they can offer it to armed forces retired at $0.45 suggests to me that that is their real bottom line.

Also I think their intra-day margining may be better than others because I think it is pure real-time SPAN without these leg-counting exercises that others use.

Even if you cannot get the TradeStation white-label version, it might be favorable to use TradeStation Clearing with the original version of CityTrader that you already have.
 
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Testing whether IB could be viable (I have not used it in many years), and using their demo version, I tried entering a butterfly spread in ES options for quoting.

IB seems to quote a ludicrously wide spread, basically just taking the worst possible fill from the bid-ask spread on each leg.

Would this also be the case in live trading?

I know from experience that if I set up the same spread on the exchange using a UDS on a platform such as OptionCity, it would be extremely narrow.

Is there a potential workaround to this: submitting a test limit combination order with an unrealistic limit price, intially? Would that force IB to create a UDS on the exchange and immediately pick up the narrower spread quote that would result? Bob may know since he can introduce to IB. (By the way thanks for the sad news that CME Direct will start charging potentially hefty quote fees).
 
comintel said:
By the way thanks for the sad news that CME Direct will start charging potentially hefty quote fees).
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CME Direct will still be free, but they will start charging professional market data fees in Q2, 2018. They will offer rebates based on volume. If you only trade one exchange, it is not bad. If you trade a few, it can add up. I would not rule it out as the policy can change. Only City Trader and CME direct have RFQ to reduce the spreads. I still like it best for those that are willing to ignore their shortcomings.
 
Robert Morse said:
CME Direct will still be free, but they will start charging professional market data fees in Q2, 2018. They will offer rebates based on volume. If you only trade one exchange, it is not bad. If you trade a few, it can add up. I would not rule it out as the policy can change. Only City Trader and CME direct have RFQ to reduce the spreads. I still like it best for those that are willing to ignore their shortcomings.
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Yes I am very much considering CME Direct still. It (or CityTrader) may be the best choice, I agree. It occurred to me also that they might delay the change a year, or add a non-professional exemption, etc.

I am just trying to make sure I consider all possibilities.

QTrader *appears* to say they also support RFQ and UDS now - but you would have to use their spread formula tool / language. Maybe there are limits to that, I do not know.
 
comintel said:
QTrader *appears* to say they also support RFQ and UDS now - but you would have to use their spread formula tool / language. Maybe there are limits to that, I do not know.
More...

CQG supports RFQ in CQG Integrated Client, CQG QTrader, and the Client APIs. RFQ functionality allows you to request a quote directly from participating exchanges to assess the market and manage risk prior to placing a trade.

That is new. I did not know that.

Thx

Bob
 
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