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Trading futures with Tradovate "no commissions" broker?
Started:May 15th, 2016 (02:58 PM) by jmboss Views / Replies:9,089 / 47
Last Reply:October 21st, 2016 (07:58 PM) Attachments:0

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Trading futures with Tradovate "no commissions" broker?

Old May 15th, 2016, 02:58 PM   #1 (permalink)
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Trading futures with Tradovate "no commissions" broker?

Anyone currently trading futures with Tradovate "no commissions" broker? You do pay a quarterly or annual membership fee in advance, but the more trades one does, the trading costs drop rapidly. Looks very attractive to me, especially if one does a lot of daily scalping trades. The cost savings should add up fast enough that I can't see how another broker to date would be less expensive; unless other charting and advisory services are considered to justify higher commission prices.

Of course since I currently use TOS for my futures trading, switching to almost any dedicated futures broker would be a cost saver for me.

Seems like Tradovate for futures trading is somewhat akin to what Robinhood is for stock trading.


Last edited by jmboss; May 15th, 2016 at 03:25 PM. Reason: More detail
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Old May 15th, 2016, 02:58 PM   #2 (permalink)
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Old May 15th, 2016, 03:36 PM   #3 (permalink)
Market Wizard
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Answer
This post has been selected as an answer to the original posters question Answer


Update: subsequent posts point out that they must send their orders to a futures exchange where they are executed, and so my original post is in error. The sort of things that can happen with Forex and other markets will not happen with futures.

I would just delete it, except it has been quoted by others, so I am replacing it with this note instead.

I would ask @SoftSoap and @traderwerks to edit out their quotations of my post, if they would, so it does not remain in any form. I don't want to perpetuate a misconception about how the firm does business, when it has become clear that the idea is incorrect.

Thanks, and I apologize for speaking hastily.

Bob.


Last edited by bobwest; May 16th, 2016 at 01:18 AM.
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Old May 15th, 2016, 04:46 PM   #4 (permalink)
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bobwest View Post
I have no experience with this, but it seems logical to me that if a broker is not charging for commission, they are making their money through the spread; that is, the fills you get would be worse, and the difference is their profit.

You are thinking of Forex brokers. Futures are executed at a central exchange, so they are not making money on the spread.

Looking at the web site, they are just cutting costs. They are an FCM so they do not pay another FCM and they only offer one platform ( and apparently one feed ) making their customer support costs lower.

They still charge a $0.09 "transaction fee" whatever that is, so the ES is $2.54 a round trip.

Math. A gateway drug to reality.
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Old May 15th, 2016, 05:46 PM   #5 (permalink)
Market Wizard
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Futures Edge on FIO

traderwerks View Post
Futures are executed at a central exchange, so they are not making money on the spread.

You are probably right on that. Forex could do it, and I think stocks as well (who knows where a stock order will be routed?), but if they are an FCM executing through the CME, there's no leeway for skulduggery.

Bob.

Edit: removed an irrelevant comment.


Last edited by bobwest; May 16th, 2016 at 01:21 AM.
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Old May 16th, 2016, 12:46 AM   #6 (permalink)
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From Support

I knew the answer as its Futures but put it to them in an email for official response.

"Thank you for reaching out and for your questions.

We do not make any income off the spread. With futures, unlike forex and CFDs, all order must be sent to an exchange. So we do not interact with any flow and do not make any income off the spread. All Tradovate order are sent to their respect futures exchange.

We can be more aggressive on pricing because we own our own technology. As a broker with our own technology you are not paying twice. In addition, it really does not cost a brokerage firm more to process a 10 lot than a 1 lot so we are passing that savings onto our clients.

I welcome you to try Tradovate with a live account "


Only snag is what is their platform like but never know for some people it could be good.

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Old May 16th, 2016, 01:29 AM   #7 (permalink)
Market Wizard
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I have edited my original post to remove my initial idea, which has been shown to be incorrect.

Sorry, @jmboss, I'm afraid I didn't give a good answer to you after all. If you could remove the "Answer" flag from my post, it would save me some additional embarrassment.

Thanks to @traderwerks and @Rory for pointing out the realities of futures trading on exchanges, which I knew, of course, but which had somehow slipped out of my head when I answered the original post.

Bob.

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Old May 16th, 2016, 05:08 AM   #8 (permalink)
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they have 3 Membership Plans subscription
https://www.tradovate.com/pricing/
Its really Too Good to Be True?

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Old May 16th, 2016, 01:44 PM   #9 (permalink)
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Obelixtrader View Post
they have 3 Membership Plans subscription
https://www.tradovate.com/pricing/
Its really Too Good to Be True?

You do the Math. To the best of my understanding:
The site says:
"Exchange, NFA, and clearing fees still apply."
The Advanced Version:
For the annual you have to pay upfront.
$139X12= $1668 this is paid upfront
If you do not do annual, it's $199 per quarter upfront $597 per quarter

The same logic applies to the "Active" please click the Quarterly and Annual to understand your charges.

If you are interested in ONE time flat pricing for futures, we can provide it for $1,000 per year.
We have been providing this since 2015.

@traderwerks They are NOT an FCM. They are an IB of Dorman according to their site:
https://tradovate.zendesk.com/hc/en-us/articles/205134408

If I am wrong, please correct me.

Thank you,
Matt Z
Optimus Futures

There is a risk of loss in futures trading. Past performance is not indicative of future results.

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
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Old May 16th, 2016, 02:35 PM   #10 (permalink)
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NFA


Supporting @mattz link, looks like the FCM registration was withdrawn in March 2016:

https://www.nfa.futures.org/BasicNet/Details.aspx?entityid=ZgFMaNUYaDM%3D

Prediction is very difficult, especially about the future - Niels Bohr, Danish Physicist
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