I dont use an IB, I went straight to them.. and this is still possible... just please keep in mind that I didnt do this with $5K... as an LLC I did it with a somewhat slightly bigger account... after all, cant do spreads with $5K... so if you have $5K, go with DDT... if you are $25K-50K+ then just go direct...
I was under the impression that this was a Crossland thing, not a TT thing - as I have had TT with Velocity, and had no such parameters, but have a CTS feed with Crossland/DDT, and do have these pre-defined risk parameters.
I must say, though, that I did not open an account with Velocity directly, so maybe that is a part of their account-opening process. I was with someone else who was cleared by Clear Chicago Group (Velocity's white-label service), and when they divorced, Velocity inherited my account. Still, if it were a TT requirement, one would think that I would have had to set these parameters up with CCG when opening the original account.
It's not like it matters all that much - I was just adding my $.02 worth, because I haven't had these risk parameters with any other firm other than Crossland (and I've evolved through 4-5 accounts so far in the learning process).
Personally, I think these risk parameters are a very good idea, though, and I really believe they have an influence on making me trade more responsibly than if no one's watching. Most brokers will let you blow your account in a single day if you feel like it - so long as you don't hand them a debit balance in the process. Crossland won't let you do this. At least not all at once - (though if you're determined to blow it, I'm sure a way can be found . . ).
Anyways, since this is a Crossland thread, I'm just going to throw it in here that I think Crossland is fantastic. The biggest thing I can say to sing their praises is that I don't notice them. Stuff is just right - the way you expect it to be. This has not been my experience with all of the brokers I have tried to work with - and is part of the reason that I ended up where I am . . . (do not construe this to imply something bad about Velocity - I am referring to other firms here).
On the downside, I also find the RAN Web nearly useless - in fact, it only works during US cash-market hours - which has resulted in a couple of calls to the Tech Support Dept in the wee hours of the morning (I generally trade European hours).
Since I changed to the CTS feed, though, RAN Web is no longer necessary - CTS offers independent confirmation of fills/being flat 24-hrs a day thru T4 Web (from which you could also trade if you wanted).
So now that the independent-confirmation issue is covered for me, I really have no complaints to speak of.
High marks all-around.
Last edited by ddouglas; November 6th, 2011 at 12:05 AM.
They(Crossland) were the first ones that asked me for risk parameters as well, which lead me to inquire and start learning about the platform the FCM's use to manage the users.
What I came to find out is that all FCM's have the same ability via TT and CQG as well, but it is up to them to use it or not in a manner that will truly help protect the customer/trader. I dont know why all would not want to do it, because in the end it is as you state it... it protects you from blowing your account up. I would think they would be interested on your longevity, most are not it appears.
I have asked Velocity to do the same as I had with crossland on my backup accounts with them, to setup daily limit loss and number of contracts max, and they basically had no clue what I was talking about. Even after directing them to the TT product and how they needed it to do the setup, they remained oblivious and said risk management was my responsibility, not theirs.
Keep in mind they will close a position on you as soon as it is about to eat all your equity so they dont have to chase you collecting a debit, but they wont help keep you in business to trade another day if you lost your discipline temporarily and are trading bigger than you should, or lets say if a strategy that you had automated went nuts and got you in trouble all of the sudden and you are not around to monitor it.
Having risk management on the FCM side is a blessing I would think, but not all FCM's see it that way, which is a true shame.
I like them. Never seems to be any hiccups or anything. Rates are good. One time my internet went down during an open position. I called in and it was flattened immediately. Service is good. For futures it's probably the best shop out there for any retail trader that I know of.
This is not exactly correct, all IB's do not mark up their commissions. In fact some may have a lower rate than the FCM. Many FCM's deal mainly with institutional customers and leave the retail to the IB's. FCM's aren't always equipped to deal with new retail customers and some of the maintenance that goes with it, so they will refer them to their IB's. I work for an IB that has been clearing with Crossland for two years a find them to be an excellent firm. They have a decent selection of platforms and their tech dept is really knowledgeable. They are clearing FCM that doesn't have a trading division or any of the investment risk that is associated with the larger FCM's. Recently we have found out that can be an advantage for some of the midsized FCM's.
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ok, so if they are not marking up their comms, how do you make money? does the FCM rebate you based on transaction? either way, the IB P&L is built into the comms from what I know.. so yes, the IB might have lower than the FCM directly, but at the same time the FCM to the IB transaction cost is lower than what the IB is charging the customer... there are reasons why the FCM's hold the IB's to certain volumes in terms of transactions and funds on deposit...and they reserve the right to revisit a prior agreement if within a certain amount of time (agreed as per the contract) the volume stated by the IB does not materialize.
yes, indeed... but lets keep in mind that what got them in trouble was overleveraging their bets... and to top it off, they dipped into the seggregated accounts... which goes to show a simple thing... regardless of your FCM size... they can all touch your funds and screw you... so what if they are fined later on, in the mean time ... one would still be screwed.
the best insurance is to never have all your eggs on a single basket.. so if you have 100K+ account and you live off your trading, ensure to have two FCM's at least and that they are both clearing, or that if both not clearing.. then they are both not the same.. and lastly, keep on the account only what you need to trade your desired size... everything else.. wire out to your bank(s)...
Last edited by sysot1t; November 8th, 2011 at 06:20 PM.
At the end of the day it will be the FDIC footing the bill and here is simply why. The seg accounts are held at banks which are covered by FDIC insurance. MF global was at Harris bank. Crosslands like all FCMs use a bank account to hold these funds. They use Fifth Third. Bottom line, FDIC normally insures up to 250k but I read on their site that up until the end of 2012 the insurance is unlimited. Even if this sketchy 1.25 CFTC rule allowed MF to use their customer funds, the FDIC is still insurer of last resort for customer funds held segregted at an FDIC insured bank. It would just suck to have to wait until you get your cash. That is the problem, the delay.
The Federal Deposit Insurance Corporation (FDIC) does not insures FCM's or BD's... it insures BANKS... and no bank failure has taken place. The deposits might have been loss due to "fraud", by violation of the seggregation rules, again.. not bank failure. Also, I dont think the Dodd-Frank provisions with regards to unlimitted protection had this in mind nor do they cover it since there is no bank failure.
The only "Insurance Corporation" that has purview over MFG is The Securities Investor Protection Corporation (SIPC) given MFG was a Broker Dealer, them and anyone else that insured the funds in addition above and beyond the SIPC limits... assuming of course, that protection extends to the commodity business... I should have clearified before they are not the same thing.. being a BD and an FCM..
I sure hope you are not keeping millions with any FCM assuming you are covered by the FDIC... because you might come to find out that you are not as protected as you thought.
Last edited by sysot1t; November 8th, 2011 at 08:04 PM.
I guess that is true. The bank would then be hit with a massive lawsuit for fraud I am guessing. I guess it's best to be Canadian and have most your cash at home in any bank or broker, ha. They are all insured up to 1 million here. That is cash in any brokerage account, futures, etc.
But an FCM who doesn't trade it's capital period is obviously a better fit with ultra low risk than some of these big outfits which engage in such activities.They have little to no risk. The risk and what I am getting at is with the bank that Crosslands would deal with. The bank does take on risks if you look at their website. Sadly most banks fall into this category now unless they're smaller community banks who are well managed.