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So, I received the email below stating that my account will be transferred from Phillips Capital to NinjaTrader Clearing. If I dont want the transfer, I have to transfer my money someplace else or withdraw it. The end result, I will no longer be a client of Phillips Capital. I looked at the Phillips Capital website and I don't see anything about them going out of business. So, why would phillips capital drop the ninjatrader platform?
Can you help answer these questions from other members on NexusFi?
They emailed us about this a few days ago. I get the impression that Ninjatrader wants to keep everything internal and integrated so they made their own brokerage. Haven't heard anything good or bad about it though.
Don't worry it has nothing to do with your account. About 6 months ago Ninja Trader announced they will be starting their own clearing firm instead of outsourcing everything to Phillip and Dorman. Now that its up and running, they're transferring everyone to their own in house accounts.
It's really the other way around. NinjaTrader has dropped Phillip.
NinjaTrader Brokerage, which has used Phillip and Dorman as their FCM's, has gotten their own FCM up and running, "NinjaTrader Clearing," and is transferring all their accounts to the new entity.
If the term "FCM" is new to you, it's one of the somewhat strange things about the futures business. An "FCM" ("Futures Commission Merchant") is the firm that holds your money in their account and that sends your trades on to the exchange. Phillip is an FCM. There are other firms, called "Introducing Brokers," and NinjaTrader Brokerage is one. An Introducing Broker ("IB") is a firm that deals with customers and sets up their accounts with an FCM. To make matters more confusing, many FCM's do their own customer service and don't only have accounts that came to them from an IB. But this is just part of the way the industry is organized.
So you have an account with Phillip, and, since you got that email from Ninja, I assume you also went through Ninja when you set up the account. Now Ninja is moving their accounts to their new, wholly-owned FCM, NinjaTrading Clearing.
It's as simple as that.
Whether you should accept the change is up to you, of course. But this is the only way that you can stay with Ninja, and continue to use the NinjaTrader platform to trade with.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
I got an email from ninja trader brokerage about a week ago, maybe two, that basically said that ninjatrader clearing is a ‘non-clearing’ brokerage and that they will be migrating all of their accounts to ninjatrader clearing…which will use dorman as their clearing firm. However, ninja will be providing an interface to get statements, deposit/withdrawal funds, check positions, etc.
I got the impression that ninja clearing will not actually be clearing orders, but dorman would be fulfilling that role. Which was a little confusing. I’ll see if I can dig up that email…
Yeah, I am surprised that the word "clearing" has not caused more confusion. It gets misused, widely and pretty deliberately, because it sounds important, and in fact, it is. Often, an FCM is called a "clearing" broker, and it is said that an IB "clears" through their FCM. Not necessarily. A "clearing" broker actually means something else.
Here's the situation:
There are "Introducing Brokers" -- one of which is NinjaTrader Brokerage -- that are in business to find customers and "introduce" them to "FCM's." As mentioned in a post above, an FCM is the firm where your money actually is, so one way to look at it is that they are your "broker." But your "broker" is also your IB, if you have one -- NinjaTrader Brokerage in this case.... sorry it's just how the industry is organized (or "disorganized," perhaps. )
Just realize that there are these two levels, and, while many FCM's also open accounts directly and do their own customer service, the IB's are in business to get accounts for FCM's. Some IB's, such as Ninja, also do nice things like provide a unique trading platform, or otherwise provide a service. You have to assess their value yourself.
So what about this "clearing broker" thing? Some firms -- and they are actually very few -- are also "clearing brokers," a third and more fundamental layer. Every non-clearing FCM broker uses a clearing broker. A clearing broker is responsible to the exchange for the transaction they clear, and every trade goes through a clearing broker. I don't want to get any further into it than this, and suggest that Google is your friend if you're interested ( ).
But here's the thing to know: even though a number of firms have let themselves use the term "clearing" (loosely) in their names (e.g., NinjaTrader Clearing or AMP Global Clearing), they aren't clearing brokers, and they use real clearing brokers to clear their trades. Here is the list of actual clearing brokers.... Note how few there are, and how many are big banks, not what you would think of as "brokers" at all: https://www.cmegroup.com/clearing/financial-and-regulatory-surveillance/clearing-firms.html
Dorman is there, as is Philip. NinjaTrader Clearing and AMP are not.
So, to pull this together, the new NinjaTrader Clearing (a "non-clearing FCM") will be the FCM for NinjaTrader Brokerage (an IB), which fulfills pretty much the Ninja vision of a transition from being just a trading platform to being a brokerage that Ray had some years ago when he bought a failing IB (Mirus Futures, in 2014) and renamed it NinjaTrader Brokerage. (See here: https://ninjatrader.com/NewsReleases/NinjaTrader-Introduces-Brokerage-Services-with-Acquisition-of-Mirus-Futures )
But a "non-clearing FCM" needs a clearing FCM, so that's what the email reference to their being a "non-clearing FCM," and to Dorman being their "clearing FCM," means.
Does it matter to you? No. You probably never knew what the clearing broker for your trades was anyway, and you didn't need to know. It turns out that both Phillip (note: there is no "s" in Phillip) and Dorman are on the list, so whichever one you had as your FCM also did your clearing. Now, if you stay with Ninja, NinjaTrader Clearing will be your FCM, and Dorman will be your clearing broker.
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Do not blame me if this seems too complicated for any rational person to put up with. It is, but I'm just recounting how it is. It's not my fault. Blame the futures industry for the way it grew. They must have had their reasons.
Someday I will try to put all these things I write up multiple times in one place. But I hope this has been of some use now.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
A year (or so) Ninja bought Transact-Futures (Clearing) and Infinity-Futures (broker) and it seems now we can see the result/reason for this transaction
So theres about a week to go until the supposed rollover to Ninja Brokerage and clearing, I've got nothing from Ninja on a new login connection, account number or any details. Hard to believe they want to leave it this late.
Has anybody received a welcome letter with instructions as yet ?
Are we actually able to stay with Phillip Capital ?
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