Is it true that exchange-supported implied spreads such as the crack spreads on NYMEX and ICE cannot be traded optimally at Interactive Brokers, and that I need to go to Advantage Futures to be able to trade them directly without legging in and out? Also, what is the lowest cost platform to get started with, that allows me to trade these implied spreads. I do need anything fancy in the way of charts or click-to-trade. I have already been doing spread-trading on ICE - WTI versus Brent with manual legging on IB, but I am interested in expanding my spread trading in energies. Thanks.
Com, I have clients who clear Advantage, New Edge, Rosenthal-Collins, Crossland, and Man Financial among a few others. Every client that I take on who comes to me clearing IB, TransAct, Velocity, TOS, etc. makes a switch - usually to a major Chicago FCM, who: 1. knows what a spread is, 2. has a risk manager that knows how to margin a spread correctly (the credit), 3. has a decent non-member cost structure, and 4. supports an execution platform. IB has always sucked in terms of exchange-supported implied spreads, which is too bad, because these products are unbelievably good. As a matter of fact, I have a client in England who tells me he is enrolling in a Nymex program for exchange-supported energy flys. Most of my clients use TT or CTS; having said that I have a few clients who use CQG-IC and a couple who use very high end platforms. Those platforms have the exchange supported spreads already programmed into the system in terms of the GUI interaction with the order tickets. Advantage in particular has a great program for TT and CTS where they charge clients on a per-trade basis to lease the software, and the charge is capped at a monthly rate of about $500. That is a fantastic deal, especially since alot of what we do is swing trade spreads. As a side note, I have used TT since the late 90's, and have always had the Pro license by default since I buy access keys for several exchanges. I seldom use the AutoSpreader function. Even for our true synthetic spread combinations, I choose to leg those manually.
Ah thanks - now I finally understand why these specialized platforms are essential - because they have the exchange-defined spreads programmed in. I found the low per-trade pricing for CTS on the Advantage web site ("$0.50 per contract with a $25 monthly minimum- Includes first 50 contracts traded, no Charts"). I do not see a similar offer mentioned there for Trading Technologies ("One market license 700.00/month") but I can ask if there is a lower pricing scheme for it also. Probably CTS is just fine anyway to start with. And that is sad that I have to switch from IB but I will do it. Thanks so much to SpreadProfessor / bone !
In CTS, you choose an exchange and then a product. If you choose CL, an order ticket will appear. At the top of the order ticket, there is a strategy pull-down where you can choose a 'spread'. You have a choice of intermarket spreads like calendars, and intramarket spreads like the cracks. In TT, you go to 'market explorer' and choose your strategy from the 'futures' or 'spread' icon. There is also a little 'flame' icon which is relevant for the ICE financial swaps markets like PJM-W electricity or the HHNG swaps. If you are legging spreads, you can use combinations of exchange-supported spreads to leg into flys and condors, and of course you can pull up individual futures order tickets to leg into various synthetic combinations. Of course, that is a very elaborate discussion best served elsewhere.
Those sound like great platforms to trade off of. IB's spreadtrader (forget about their charts) not one of their strong points. Yes, Bone. Thanks for sharing.
Great moves on the gasoline crack today. Down close to 15% at one point today. Each dollar this "instrument" moves is $1000/contract. And yes, I have figured out how to chart and trade this contract natively in NinjaTrader.
Go to cmegroup.com, start under margin requirements. You'll gradually be able to tease out what you can trade. You have work ahead of you.