I wish that years ago when I was making this transition that somebody would have laid out all the necessary steps and potential roadblocks for beforehand. Suppose you are a reasonably profitable single trader. You are on Interactive Brokers and do 400-600 contracts a day making 100-200K/year. You think about hiring other traders but you fear being able to retain them after training and you're not sure you really want to complicate your life. I'm save how to handle hiring people for another time. What I want to focus on is that transition from a retail platform like IB or other Broker to an Institutional Platform. How to know when you are ready and the potential pitfalls. There are 2 reasons to make the move. Speed and fees. If you need access to fast spreaders then speed is super important. If fees are important to you make sure you would be saving at least $10,000 a year by making the move else the headache is probably not worth it. A retail platform bundles services. They clear your trades as well as provide software for execution and probably charting. They also track your position intraday. This is all usually bundled into a single fee that probably averages to around 50-60c for doing 500ish contracts a day. That's about $250-$300 fees per day (not counting exchange fees). When you move off the retail platform every becomes unbundled and you start to have more fixed costs. Clearing fees go down to average around 25c (much less when you start doing high volume) but you usually have to pay $500-$1500/month for an execution platform which might or might not track your intraday position. Next you might want to rent or buy a seat on the exchange for the products you trade the most - your clearing company should help with that - and you might want to look into co-locating a server in one of the Chicago buildings ($1000-$7000/month). Risk starts to take on a different definition. Retail platforms will typically let you buy if you have enough margin and they might give you special margin rates on certain products. Trading new products is pretty straightforward. If you have enough margin the order will go through. Institutional is typically very different. Risk is defined as how many of a specific contract are you allowed to get into each day. So you tell the risk department you want to be able to buy 10 CL contracts. You have $300K on deposit. No problem. Then you try to by 1 ES. Can't do it. Need to request risk for every product you want to trade before trading it. So, Monday you buy 8 CL, Tuesday you add 8 CL, Wednesday 10 more. Now you have 26. Now you want to sell all 26 to get flat. Can't do it! You need to call the risk department and get them to bump your risk up first. Most clearing companies care about overnight margin and care very little or do not even track intraday margin. And the systems that monitor your intraday positions are totally separate from the systems that monitor your risk. So, suspend rationality at the door - don't argue that nothing makes sense and move on. Position tracking: It is YOUR responsibility to track your position. If network connections go down and you fill without getting notified or the exchange starts breaking your trades it is not the clearing company's problem. It is your problem and you need to call the exchange and reconcile your position with them then let your clearing company know. If your clearing company accidentally puts someone else's trades in your account it is YOUR problem. You have to have some way to look at your overnight statement and be able to prove that you did not make those trades. If you are trading many thousand contracts a day this becomes kind of a pain. I've seen several people blow up this way - exiting a position that they never owned in the first place. So when the 'entry' was removed weeks later their account went to $0. Most clearing companies offer many ways to execute trades: Pats, TT, Orc, RTS to name a few. What exchanges you can access is the combination of what the software supports and what exchange gateways are offered by your host. Pats: never used them - seem to be getting phased out some places TT: use them a lot. Fairly good exchange connectivity. Tech support is very spotty. Some things they care a lot about fixing and some they don't care at all ever. ONLY FOR FUTURES AND FUTURES OPTIONS Orc: thought about using them. Their software model seems like the most elegant but they aren't very standard RTS: connects to almost anything. Lots of option trading. Futures are generally good but if you run into a bug it can be a problem. On a product I used to trade I submitted more than 10,000 orders when they ran out of order numbers (for that product) and their solution was to tell me I can trade it the next day. This was 2008 when the world was going crazy. Seemed like a bad solution. Direct: If you are a pretty good programmer certifying your own direct connection to an exchange isn't really that bad. Best to buy a good fix engine. You will have to provide a risk module for your clearing company. Major advantage is speed. With a direct connection you will beat anyone who is not direct (if you don't make any dumb mistakes). CLEARING COMPANIES I should have put this first. There are many clearing companies to choose from: NewEdge, Advantage, RCG, Fortis, MFGlobal (uh, maybe not!). They all cater to different traders and your success will be highly dependent on which one you chose. I have not used them but RCG is probably the easiest for those making the transition from a retail platform as they provide and support their own execution software (ONYX). Advantage is great for keeping costs low. You can rent space in their offices in Chicago for a very reasonable price and amazing speed - even just using TT. And they do all their own TT infrastructure and direct exchange access server hosting. Used them. Fortis seemed like kind of a confusing place to me as nobody ever seemed to know who I was when I would call with a problem. Not sure what was going on there. NewEdge is very large and mostly caters to very large funds. They have a Professional Trader Group for smaller accounts <5-10M which is pretty good. A good place to end up but it would be really intimidating to start there.