Broker and Platform for Exchange Spreads and Options and API?

Discussion in 'Commodity Futures' started by comintel, May 17, 2011.

  1. As per another post elsewhere, I am interested in small-scale trading of Exchange Spreads on Energies on ICE, but I like to trade crude options too.

    It looks as if Cunningham CTS T4 from Advantage Futures, kindly mentioned by Spread Professor / Bone as one option for trading exchange spreads (which admittedly is all I asked about initially), does not have crude futures options for either Nymex or ICE.

    Ideally I would also like an API which CTS does have, so that part is good,

    Interactive Brokers has some things (Exchanges, Options, free API) *except* exchange-listed spreads. Actually their options are very limited too - no ICE crude options.

    I could always continue to use IB and leg in, I guess.....or else I will need multiple brokers and platforms, it seems, unless I pay a lot for X_Trader plus API.

    I am still fairly small scale and trying for a low cost platform.

    Thanks for any further comments.
  2. Why do you want ICE crude options? I'm fairly certain Globex has far more depth and lower spreads than ICE.
  3. Right the Globex ones are fine for WTI, and I do trade those, but not, I think, for Brent.

    I would like to trade Brent options against WTI options. It is just one trade though and perhaps not essential.

    ICE has both Brent and WTI futures so I like to trade on ICE. I guess there is Brent on Globex but IB only carries the BZ variety.

    In other words, given that to get Brent futures, I realistically have to use ICE, I might as well try to do everything on ICE to keep margin down. I am often a position trader so the narrowest spreads are not necessarily crucial.
  4. Can you go into OTC markets?
  5. I have not traded those so far - probably I do not have the capital yet - but I guess you are saying that those would be the way to go for the more sophisticated swaps I definitely would like to trade them eventually....
  6. jjw

    jjw ET Sponsor

    Rithmic supports exchange traded spreads and options. We also have an API available in C++ and in .NET.

  7. That combination appears to line up exactly with my needs.

    I like the C++ so that hopefully I am not stuck totally on Windows.

    I have just finished reading many many threads on Rithmic, which are very positive. Iit seems very attractive.

    It seems that Vision Financial Markets is one of the largest and most committed FCM's for Rithmic so I am checking them out.

    And, just in case I need lower commissions than Vision wants to give me, it looks as if Deep Discount Trading, clearing through Crossland, is another way of using Rithmic.

    So I am checking these out. If anyone thinks that Advantage has advantages that I am missing over Vision, particularly in the area of energy contracts and spreads coverage on various exchanges, please let me know either here or privately.


  8. bone

    bone ET Sponsor

    In terms of strategy on the WTI vs Brent, if you are long premium (long WTI calls and long Brent puts for example) on both legs then fine. If your strategy envisaged some sort of credit spread (like long WTI calls and short Brent calls) then IMO you are going to get margined up the wazoo and the price of TT X-Trader is going to be the least of your worries. During the first of the year, the 20 day historical vol on that spread was over 300 %, and at present the 20 day vol is a tad over 88 %. In essence, the trading ranges are enormous and the swings in that spread are an adult swim.

    My advice would be to figure out the performance margin requirements of your strategy before you get involved with clearing and execution. Look at the Nymex and ICE exchange intercommodity SPAN margin rates. Absolutely critical.

    I have done alot of energy options, but they were always done through an OTC broker and cleared through Nymex ClearPort or ICE LCH swaps. My book was assigned well into eight figures for margin.

    Takes very deep pockets, even if you are making markets and hedging your delta risk immediately with futures.
  9. Thanks for your comments, Bone!

    I am not planning major plays in the options.

    I have been trading the WTI versus Brent futures spread for some time and am just looking to enhance it a little with some options as well.