I've read many of your posts Thomas and admire that they ae generally a bull's eye when it comes to being on point and clearly laid out. Yet it is my experience that good IB's (of which there are admittedly few) should not be viewed as one man or ten man shops. You have the full depth of the clearing firm plus whatever expetise the IB brings to bear. I have never emailed Howard -- days, nights, weekends -- and failed to get a response within five minutes and yes, I mean that litterally. He seems always available by phone yet never to mind if I choose to deal directly with Crossland's staff on a given issue. I've found the DDT/Crossland combo a winner and know others that feel the same way. That said, as purely a directional trader doing no spreads through them, my business is very straightforward. Others may find advantages in dealing direct.
I want to make sure that is clear that by no means howard is a bad broker, as you have said, he is very available and also trades himself and services those small accounts quite well, I've had the pleasure to have held conversations with him... which is why he intro's to CRS and does quite well... there are larger IB's to CRS that do not provide the same level of attention, and same one man shops (like optimus) that do not provide the same either... so the individual broker is more meaningful, just like a banker, not the bank.. I am merely stating that to go direct, it requires more funding... while I believe DDT will take you with 5K...
While I am comfortable leaving larger sum with Interactive I never leave more than I must at any of the smaller brokers. I can day trade 5 lots of ES with a firm like DDT with a $5,000 balance and still have a cushion. A good small firm that has low (or even ultra-low) margin requirements is a huge asset to an aggressive day trader. In an envirnment that provides no SIPC like coverage but relies soley on segregation those that leave significant sums at smaller firms simply do not understand (or choose to ignore) counter party risk. I'm willing to incur that risk to the extent of five, eight and occasionally ten thousand dollars in exchange for leverage that is both useful and unreasonable -- yes, I said unreasonable! And before I get the usual lectures on how you need six or seven or twelve figures for every contract you trade I admit that 100 to 1 is rediculous leverage but the number is really a fantasy for a reasonablty capitalized trader. It is only relevant for the undercapitalized trader. The only number that counts is not what's at the broker (smaller is better) but what your net worth is (largger is much better). I have been warned for years that some day I'm going to "blow up'' an account. Well , since the broker will, if he can, close all positions before that happens, I probably will never blow one up and, if I do, I'll wire in the few thousand needed to make them whole the same day or the next morning In the scheme of things small IB's with low margin requirements, reasonable commisions and good customer service fit a niche that works for people.
not sure we are arguing any longer the same points, but with regards to what you have stated below... i could not agree more... to be honest, I was keeping more than what I needed with CRS at the beginning ... after PFG, I talked to Ed because I was concerned, I wanted to make sure my funds were "safe"... and while they are, since they are in deposit with the CME themselves, I wasnt ok with having $50K on deposit when I only really used at best $10K... so I mentioned to them my concerns, and that I would sweep my excess funds to my bank and they were ok with it (this was retirement money) ... now, I just sweep out monthly anything over $10K... and since I monitor my positions, wiring from my bank takes place the same day if I were to be over extended... so I agree with you, keep only what is needed and take advantage of crazy leverage... my perf margins are low anyhow because spreads get credits, so I can carry overnight with what would be day trading margins to others... which means, if I have lets say $250K, in reality... $10K are with CRS and $240K with bank... if I needed more margin, I wire more money in... if i had a margin call, I would wire more money in... so after PFG, I am a strongly in favor of keeping only what is required to trade... better to pay $30 for wire and have peace of mind than to wonder if your funds might not be there the next day... same would apply if I was allowed to do equities, I would keep only what I needed to trade... so if I had 30x1 I wouldnt go over $250K on deposit with anyone (assuming $6M-$7M was enough for me to spread...) anything above that amount would be swept out... period... btw, not all brokers will close the positions right away, you can actually go debit with a broker... but most will close things if their risk management dept is any good... considering they are in the hook until they can collect from you... just my 2 cents ....
If I didn't think a firm was smart enough to protect their own ass (CRS clearly is) I wouldn't be there. Wish a SIPC like scheme was in place for futures traders. It would costs pennies per contract. God know's the exchanges are not shy about raping retail as it now stands.
Me and my clients are with DDT, Howard really sets the benchmark of support level vs. many other companies I tried. However prefer to keep the minimum needed to trade on the accounts, it doesn't depend which broker, just a matter of common sense. When you know your stats, you're pretty sure what DD may or may not likely happen and use your capital accordingly. I recommend keeping ~ $2500 per NQ contract to my clients and am slightly more aggressive with my own $. So far even increased Crossland requirements didn't hurt. Hope they don't keep increasing them as even such a conservative company as IB has minimum balance of $2K and not more.
Update : DDT confirmed that the clearing firm increased the account minimum from $3K to $5K just temporarily until market conditions stabilize again. DDT also confirmed that they accommodate experienced traders of all sizes from small to large to exchange member for all of their online trading needs.
I wonder what they mean by "stabilize", I would have thought that happened by now...it was after all from that big drop in GC and the ES, and the ES is making record highs while GC quickly recovered over 40%. I know I'd like to go back to using day margin on GC.