Tradovate IB: Why not?
|July 29th, 2016, 10:59 AM||#1 (permalink)|
New York, New York, USA
Futures Experience: Advanced
Favorite Futures: Emini ES
Posts: 16 since Jun 2016
Thanks: 10 given, 3 received
Tradovate IB: Why not?
(I would have put this in the Brokers and Data Feeds sub-thread, but I do not have enough posts yet. )
I have been looking into Tradovate as a potential IB.
For those who do not know, Tradovate is a new IB (open only a few months) that charges a flat monthly fee (for example, $99/month for one trading account if you pay for a year upfront) plus $.09 per side "clearing" which goes to their FCM, which is Dorman. This is really cheap.
I can come up with several disadvantages of going with Tradovate:
- Their platform is very limited right now. But, with the savings, you can easily afford another data feed/charting package to do market analysis. (You can trade Tradovate's platform on the web or on a mobile device in addition to on a computer; that's not a big deal for me but it is "better" that what you get from many other IB's.)
- Tradovate is "new". I do not have any idea what the success/failure rate is for new IB's. I have no idea how many customers they have to sign up and how quickly to stay in business. I do know that Dorman is a substantial firm and that customer funds are segregated at Harris Bank. I just don't know how much of a problem it will be for me if say seven months from now Tradovate shuts down.
- A combination of the prior two reasons: the platform is new... therefore it has not been tested through all sorts of market conditions. (Although I guess Tradovate was already open for Brexit... any war stories out there?)
- Position limits. $500 day trade margin is available on emini index contracts, but only up to 20, with a max position limit of 75. (Contracts 21 to 75 are 50% margin for day trading.) Other contracts are 50% margin for day trading, with a 50 contract limit. These limits are not a problem for me (for the near future? hope springs eternal!) and certainly one does not even need to trade near that size to enjoy substantial commission savings from Tradovate's model. I do not avail myself of day trading margins so that is not an issue for me either.
I will say that customer service has been very responsive and helpful.
So, the point of this post: In your view, are any of the reasons listed above (or any others I have not thought of) important enough that I should avoid Tradovate? Does anyone else have any experience, good or bad, with them?
Thanks in advance for your thoughts!