I am aware of Interactive Brokers and TD which do not require a custodian for a futures enabled IRA. I have investigated both and each has certain strictures I would prefer not to have, but am keeping them in mind. Does anybody here know of any other futures brokers which allow trading in an IRA without a custodian? I would prefer to avoid that additional overhead and red tape and have more direct control over my IRA. Plus I had the unfortunate experience of being with a custodian who stopped allowing personal futures trading and now only allows managed futures, and they also raised their fees.
Do you mind sharing which custodian you previously used? I am considering moving an IRA from IB to an outside custodian to trade with my non-IB FCM and will want to avoid them if I move forward. I am not very familiar with Tradestation, but they might be another self-custodian option for IRAs, however, their "Free" commission pricing does not look very competitive compared to a traditional FCM.
They were known as IRA Services Trust, have been bought out and I don't know the name of the new owner, but it was not one of the big ones like Midland or Millennium, etc. Why are you considering moving from IB, is it solely due to the margin required? From what I have been able to find, you need twice the overnight margin in order to day trade futures there, is that currently correct? That certain is a concern of mine. I contacted Trade Station, which was a chore to get through to, and unfortunately they also require a custodian now.
Margin, commissions, and platform are the reasons for the move. Margin depends on the product but 2x seems to be the minimum for initial margin. Here are some examples that I just pulled up. CL Initial: 18,500. Maintenance: 7,500 - it use to be a lot less when oil was at 0.01 ES Initial: 25,727. Maintenance: 11,694 ZB Initial: 10,004. Maintenance: 5,300
If you use an outside custodian, I recommend Midland. We have used them for years, and they have reasonable fees in my opinion. We can address margins on your IRA account and find the right choice of FCM.
Your comments cause me some additional concern. Thanks for the info. Their website is not terribly clear. So the maintenance you mention is that for overnight or day trading? In general: How do margins work for day trading, for example a micro YM future. I am assuming I would need at least $990 x 2 or close to 2K to day trade it? Same with micro Gold, about 2K? Is there an initial and maintenance there as well, or just a flat approximate 2X maintenance to day trade during RTH?
Thanks for your comment Matt. One of my concerns about using a custodian is the expense of paying myself periodically from my trading gains. What is the cheapest way to pay myself via Midland? Do they have ACH capacities and if s the fee? What is their fee for a wire out and for a check out?
Initial margin is what you will need in your account to open the position per contract. Here is what IB is currently charging for those products plus micro ES. MYM Initial margin: 2,272 MGC Initial margin: 2,500 MES Initial margin: 2,573
You welcome. Yes, there will be an annual fee. There are no cheaper ways than their fees, as far as I know. Some stock firms that have both Stocks and Futures, can act as their own custodian. But, they may not be as flexible when it comes to day trading margins on IRA accounts, and to be honest, since it is your retirement funds, you have to be very diligent. On the other hand, if you must have a lower day trading margin for the efficiency of your capital, you would have to absorb the annual fee. Just as an FYI, when you open an IRA with a custodian like Midland, they send the funds to the FCM of your choice. Any withdrawal has to go back to the custodian. I suggest reaching out to them directly and discuss all fees involved.
Thank you for posting those current figures, so these are even above 2X maintenance to day trade them! TD is only 125% of initial, but I don't currently have 25K in an ira. What is the procedure at IB to pay yourself from gains, is it a hassle or is it easy and cheap, or even free? Do they have ACH for such? Any annual fee for the IRA?