question to @Dale Box... or any of the velocity guys that frequent here...
I was having an argument with a buddy of mine a little while ago when we were discussing accounts setups and why split across multiple FCM's... we were comparing FCM stability and all that... I shared that my backup account was with Velocity and he laughed and asked what I was doing with a non self-clearing broker.. I argued WTF he was talking about and he just said research it, which I did..
I came to find out that Velocity is not a clearing Firm with the CME, and I could not find evidence to being one with ICE (but then again I havent researched it in dept as it has only been 20 minutes)... which then brought me to researching who you cleared through if you were only NFA registered, and I came to find out it was Clear Chicago Group from what it appeared, which is the same as you given it was started by the same guy.. but I still could not find you as a clearing firm with FCM under that name @ the CME, even though you have their logo on the CCG site..
so my question is... who do you clear through? given that if you are not self clearing, that implies that you clear via someone else... curious to know.. I figure I save some time researching and just ask.
I am curious why it matters who they clear through? If an FCM has a 'clearing' issue then it is between those they have the agreement with. Themselves and would do little with us. Any issues through the FCM and the Clearing House would be still brought up through the FCM and be documented as such.
I am curious why it matters, not as a challenge, but as my understanding as it seems it "SHOULD" not matter from what I have been exposed to.
The following user says Thank You to bluemele for this post:
think of a non-clearing FCM as a middle man, no different than another introducing broker, but with slightly different regulation and requirements (well, not so slightly, but you get the point)..
you dont clarify what you mean by "issues", but to me the only (and main issue) is what happens in the case of the failure of the FCM.. which is why those with large accounts (in the millions) would normally split across two FCM's... in the event the FCM doesnt have enough resources to handle the bk of the clearing that held customer funds..
as such, I rather know who the other clearing FCM is and then make my decision based on complete information as to the financial stability of the FCM that I am doing business with...
I had to look through my links when I was educating myself a while back about FCMs, their function, operations, etc. to find this CFTC letter... but it explains it best..
anyhow, as I said... i am merely curious... if my account was bigger, I would have just gone ahead and moved it to another clearing fcm and not bother asking the question... my main account today is with crossland and as such there is no additional middle man as they are a clearing fcm with full cme membership... once my account approaches the size I care to have in it, i will just split it across crossland and mbfcc and close my velocity backup.. but I am quite far from that event.. so in the mean time, I am ok with things...
let's see if they answer in any event.. somehow i have a feeling that they wont.. but I would like to be wrong.
Last edited by sysot1t; October 13th, 2011 at 11:26 PM.
keep in mind that it can be "unlikely" due to the whole segreation, but then again.. one never knows.. risk is risk.. no matter what anyone says... funds are not insured.. merely separate from the operations accounts, but they are still comingled with customer classes...