Clearing firm for member

I'm considering purchasing a membership, anyone have ideas about which clearing firm to chose?

 

Which exchange? CBOE, PCX, AMEX, or PHLX? Ideally, you would want a clearing firm that has a local presence (not all of them have presences physically in all the exchanges). I am discounting ISE (which are entirely corporate seats), and BOX (which requires no memberships). Overall, it is up to you as to what is important to you, cross-margin treatment, low stock loan rates, low commission, ability to properly margin complex, etc, it depends on what you want.

There are at least 5-6 firms out there, ML Pro (formerly seperately known as ML Pro, AA Sage, PAX clearing), FirstOptions (part of Goldman), O'Connor (now part of Fortis), Man financial (bought Refco securities), etc.

 

Also add Bear Stearns to the list.

 

I looking to buy a CBOT class 5 seat. Important factors are commissions savings and favorable margins for complex positions.

 

I could be wrong, but I thought Bear has no option MM clients, at last until about 2-3 years ago.

 

Hmmm, you asked in the options section, so I assumed you are talking about equity options, sorry my bad. For Futures clearing, there are more choices, here is the complete list of CBOT clearing firms:

http://www.cbot.com/cbot/pub/page/0,3181,1923,00.html

Here is a partial list, ABN AMRO, FIMAT, Gelber, Goldenberg & Hehmeyer, Man financial, O'Connor (now including Fortis), Merrill Pro (PAX, Pro), Rosenthal Collins. And I think that's pretty much it. Generally, G&H and Rosenthal especializes in retail type of clients, probably won't be applicable to you.

 

I trade mini dow options ... option volume is picking up and I'd like to find a clearing firm with great rates, software and margins.

Thinkorswim has a great software package but the commission fees are higher than what I want to play.

The ideal situation is to pay member rates and margins, while using a great analytical software package.

 

You could be right. I knew that they used to have option MM clients, but did not know they left that part of the business.

 

As far as I know they exited that business before '97-'98, because they looked seriously at acquiring AA Sage (and a few other options clearing firms) before Merrill bought it. From what I have heard, Bear was just a bit slow and a bit cheap.

 

A couple of things to consider. One, your commission rate is directly related to how much volume you trade, usually, and in most firms I have seen (including the ones I am with today), 2000 RT a month (for a member, not retail) is considered quite small. Two, I guess you are talking about intraday margins, since by definition of SPAN margins, the clearing firm can not lend you SPAN margin, so you are entirely on your own for overnight margins.