Guys, who do you consider the best brokerage firms for HFT? Additionally, who are the biggest players in this space in the US? Thanks
It depends on the products you want to access and your other requirements such as margin financing. If your scope is narrow I'd go with Wedbush. If you need broad access or access to cash bonds or margin financing you have very few choices. SG, Citic, Abn Amro (no cash). Those are the big HFT clearing firms for futures (if you don't self clear). Biggest HFT firms in terms of volume: Jump, Virtu, DRW, KCG, Headlands, Optiver, Tower, Citadel and I'm sure I'm missing someone obvious. HFT isn't at all what most people think it is. I did a lot of manual / low frequency trading before going HFT. It's the natural progression of getting something working and trying to scale.
For equities: FAST-https://www.lightspeed.com/trading-platforms/lightspeed-trader/platform-features/ FASTER-https://www.lightspeed.com/automated-trading/ We have solutions for futures too. Email me directly your contact information if you want to chat. Bob
Virtu is HFT and market maker not a brokerage,no? They make on the spread not alpha or client money. Their internal book is based on b-booking and they can’t take client funds.
His second question wasn't clear so I gave the FCMs first and the HFT firms second. It is funny that the best/ only FCMs for true HFT are not US based. BAML used to be an option. Not anymore.
Not sure why you say that. Wedbush Futures and many other FCM's can provide direct FIX connections to the CME iLink for those that are certified and have the assets required. They can also host at the CME data center at Aurora, IL.
Wedbush can't efficiently clear cash bonds, doesn't quite have margin financing worked out yet, has very little presence outside of US exchanges. Also, if your strategies are mostly passive, they aren't accustomed to providing the necessary exchange risk limits required. As I said, if your focus is narrow like taking liquidity on US exchanges and flat every day and you don't want to trade cash then I'd say they are the best option for a small to medium HFT firm. I really like the new Wedbush. They are shedding their old non-producing retail clients who think they are entitled to burning an FCMs resources and time because they trade 10 contracts a day. I think it's a good call. If you look at the last few years the FCMs who did well are the ones who chose to focus on a core group of 50 ish accounts and let the rest go. FCMs who went the other way and lowered the bar have really had a hard time.
Hard to follow when you jump back-and-forth through asset classes. Wedbush securities and Wedbush Futures only clear the Trade's. They have nothing to do with the execution of high frequency or low latency trading with equities or options for our clients. They do have to get involved on the Futures side. Yes, like lightspeed, Wedbush focuses more on US listed exchanges versus global equities or bonds.
Asset class is futures. But almost all futures trading firms need access to cash bonds because there is so much info there. Margin financing applies to futures. It's how you get your futures margin financed so you don't have to put up the exchange requires margin for futures. I said nothing about options or equities.
You need to define HFT. There is ZERO chance you can compete with speed with any of the firms that say they can connect you directly at CME or other via FIX. No way. The real HFTs are spending major bucks shaving off nano-seconds. If you have to go through any layer of risk control, you are already slower than the speed dependent HFTs. With that out of the way, you can get good speed via a number brokers but be realistic, you will not compete with the big boys unless you're building your own API to code directly to the exchange and can control all aspects of hardware and data.