Curious to hear how this works out if you pursue it. IB has been dragging their feet on this for years. Huge window of opportunity they're blowing IMO...
Many thanks for your post. it is really helpful. when you say trading shanghai under institutional account, what instruments do you mean? shanghai equity index? is that available from IB or other brokers? besides, I have no idea what you mean when you say institutional trader has access to liquidity provider that retail trader does not have. can you give an example that a liquidity source is only open to institutional trader? many thanks. this is a great post. please share more information.
Hi, one more question: in the post, you talked a lot about connection to the clearing firms, and the comparison of different clearing firms. Does that mean when you moves to institutional account, you become your own broker? Since IB offer institutional account, why not use IB instead? when you use institutional account with IB, you would still have these hassles?
Apologies if this is inappropriate (and if so, just ignore), but did they do anything to try and keep you?
If you have an institutional relationship you can set up a Chinese joint venture to access Chinese futures markets. It costs $$$ but your clearing company will show you how. US individuals cannot trade Chinese markets. I didn't say liquidity source. You can enroll in programs that will give YOU a rebate as a liquidity provider. ICE has many programs like this. Russell futures is one of them. They are all over the place. Basically you sign some papers and your exchange fees get cut in half.
Kind of - in a way. We discussed letting me direct connect to the exchange or use some other execution provider and do give up clearing to IB. They had never really sponsored someone like that before so there were a lot of questions they couldn't answer. But they were looking for a client (like me) to experiment on at the time. Maybe more commonplace now?
Very good question. To trade futures you do not need a broker. The minimum you need is a clearing company and a way to execute. Stocks are another story. IB institutional accounts: These are meant for small funds and lowish frequency prop trading groups. There is no straightforward way to unbundle IB execution and IB clearing. So, their institutional accounts are really still meant for retail customers. I had (still have) one. IB's data latency is 300+ms TT's at Advantage futures (when TT is working properly) is around 60ms Direct connection is 3-4ms (talking Globex here) So if you are going to do any speed sensitive spreading you can't use IB's tools
Hire me please. I'm dying to get my foot in the door. I have been watching the markets for 2 years now. I have no capital to trade with. I'd be your best employee.
garachen, I am guessing that you want to become more institutional (less retail) for the possibility of a much higher profit, either through a drastic cost reduction or speed enhancement. With 400K of commissions to IB, what was your average commission per share/contract back then? What is it now? A lot lower? Is your higher speed helping you to execute more volume? Many percentage more? Between fees and speed, which item would you say contributes more to your profitability? And, in the end, did your profit increase by a significant factor? I'm a small retail trader, but always curious about the advantages and the thought process that the bigger players have. Just trying to understand the ecosystem and where I fit in the food chain. PS: Do you feel like there are already too many people doing what you do?