CTA's experiences using introducing brokers.

Discussion in 'Professional Trading' started by nihao1234567890, Oct 29, 2009.

  1. CTA's experiences using introducing brokers.

    If you are a CTA and if you have used (or approached by) introducing brokers, please share some of your (positive or negative) experiences.

    I am an emerging CTA and currently use Interactive Brokers as client FCM and executing FCM. I also use their auto billing features. So, billing is done automatically.

    I was approached by one introducing broker who would like to introduce me a client (a fund), but they want me to use other FCM as client and executing FCM.

    I am in the process to evaluate how much change (pros and cons) to my on going operations in billing and handle withdraws and additions, etc, if I do change to use other FCM as required by Introducing Broker.

    Please share your experiences.
  2. cpardo


    IB's have their place in the CTA business. They are good at finding "Retail Accounts" 100-250k. All of them will take the brokerage business either by clearing trades themselves or by give ups. Most will want 10-15% of the incentive fees on top of the brokerage business. In my opinion it is best to work with the FCM directly if possible or to work with Cap Intro/ 3rd Party Marketing teams unless you have a high frequency trading model the brokers do not seem to be overly motivated in my experiences. This is in large part due to my system having high minimums and a fairly low trading volume.

    We are releasing a new line of products that will have lower minimums so I am going to give my IB contacts a second shot. I will let you know if my experiences are different the second time around.

    Good to see a CTA thread, we need to get more going on here. I have a feeling that the Managed Futures industry is much like Hedge Funds were in the 1990's. Our asset class is soon to be a household name, at least I hope so.
  3. For investor who has much more that 250K, do they use introducing brokers?

    I will assume that for larger investors, they will just go directly to CTA. Why they have to go through introducing brokers to find CTA?

    There really are not many CTA programs out there (about 500).
  4. ssb11


    ib's are going to care about one thing, fee share and round turns per million. if you can provide a product that will make them the most money, you can have the leverage of their sales force. some are tiny and could not find 50k, some are very large billions plus. altegris is one of the largest. two palms?? in denver. attain capital.

  5. cpardo


    It is a bit of a head scratcher that people use IB's to find CTA's when they are investors of that size but they do. PFG best for example has a platform that has about 80 CTA's on it. All of the people who have accounts there can access it and often times go through it to make an allocation. Much of the investing game is simply relationships and making the client/ investor comfortably. That is most of the battle. The other part is of course execution and or performance.
  6. cpardo


    There are actually more like 2,000 CTA's out there that report there numbers to BarclayHedge. Which means there are many more that are in the start up stage as well.

    It is 3 Palms in Denver and Attain Capital in Chicago. Both are excellent at what they do.
  7. hma


    I am using Interactive Brokers now. Thinking about moving to MF Global, RJO or Vision to get LME metal coverage. Do anyone have suggestion on
    which one is the best?
  8. crstone


    don't know anything about any FMC but MF Global. All I can say is don't expect them to be very helpful in setting things up for you. You are totally responsible for knowing everything about them, they will not tell you.

    They are the biggest from what I hear, but may be changing to Dorman or some other FCM where there is better customer service with the CTA being the customer.

    Anyone using Dorman or have a good report on a FCM that provides good customer support?
  9. Interactive Brokers, MF Global, RJ O Brien, PFG Best, Vision, Dorman, RCG, OEC = retail business entities.

    Enough said.
  10. What are the cons or limitations of using Interactive Brokers that you are wanting to switch?
    #10     Apr 24, 2011