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I'm fairly new to trading and I'm wondering if I should be concerned about the financial stability of my broker?
I use Ninja Brokerage who is just the introducing broker; the money is held by another entity. I won't name names, but this is not one of the "too big to fail" banks. Relative to the size of the financial industry, this is a small player with finite resources. My guess is most futures brokers fit this description.
Now, I understand the concept of not trading with money that you can't afford to lose However, I would hate to lose my $50K account just because the broker gets hit with some unforeseen situation and goes belly up.
So, in these times of uncertainty, I'm interested in hearing from the veteran traders on this board.
Is anyone concerned about the financial viability of these relatively small futures brokerages?
The account should be segregated.
You can always ask your broker to switch you to a larger FCM if you are concerned.
However, it's the segregation that counts, not the size necessarily.
IBs don't hold your funds, only the FCMs.
Matt Z
Optimus Futures
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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Trading: The one I'm creating in the present....Index Futures mini/micro, ZF
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I use Interactive Brokers (IB for short), basically, for this exact reason. I say basically because the other huge part for me is the account security IB offers and not many others. Talking two factor authentication.
I have had many other accounts over the years and everyone else I been with are just Intro brokers and you fill out paperwork with someone else.
I have a S5T acct and it's the same as I just described. I'm really with Dorman and they have screwed things up for me. Once I was removing funds and Dorman took it from the wrong acct. I have an acct and sub acct. Amateur hour.
IB's acct security, as I said, is second to none plus my money is actually with IB and I make a ton of interest (north of $100/mo) on funds I'm not currently using and I day trade so I'm in for a few hours....it amounts to a rebate. You get what you pay for.
I suggest switching to Interactive Brokers......You will Love it....you are in total control of your acct with them and they are very helpful if you need them.
Ron
...My calamity is My providence, outwardly it is fire and vengeance, but inwardly it is light and mercy...
The steed of this Valley is pain; and if there be no pain this journey will never end.
Buy Low And Sell High (read left to right or right to left....lol)
They are not perfect, like problematic connection with Sierrachart or heavy TWS, but other factors won the battle. For me as European investor they are the best:
1. I can hold multi currencies and withdraw them for free*.
2. 2fa login.
3. Everything what you need for investing.
4. Cheap
5. Plenty of reports inside
6. TWS is really good platform for trading options and stocks if you are not using DOM. For futures I suggest IB + some other charting platform.
7. Very secured account.
This is not broker for people who want very low margins or free trading. Nothing is for free is you are professional you should now about it, Robinhood did not know . IB needs to offer also free trading, but you can choose.
For me biggest disadvantage is that they are not supporting Trading Technologies IF it will change I will switch to this platform.
I like the attitude of CEO IB. Take a look how they survive 2008
I noticed in your post that you use Ninja Trader. Are you able to initiate trades with Ninja and use IB as your broker?
When I made the switch to Ninja in 2018 (I have a lifetime license of NT8) they left me with the impression that my only choice was to use Ninja Brokerage, which really means using Dorman or Phillip as the FCM.
I'm also curious about your data feed. I switched to Rithmic for their full market depth feed and it's been rock solid. Light years better than when I was using TOS or TradeStation.