Help: Delivery versus Payment

Discussion in 'Trading' started by Nobie, Jul 1, 2003.

  1. Def,

    If you are protecting against a fail; set it up as QSR ...
     
    #11     Jul 1, 2003
  2. ROTFL

    :p :p :p
     
    #12     Jul 1, 2003
  3. Nordic

    Nordic


    Why won't the Prime Broker take the trades via NSCC flip? DVP seems much more labor intensive.
     
    #13     Jul 1, 2003
  4. def

    def Sponsor

    metoxx/nordic, i don't deal with US clearing and thus I'm not an expert. i do know there are different fees and risks for NTSC and DTC xfers. I think NTSC costs more and may have some clearing/xfer risk.

    joetrader, DVP isn't for everyone. IB does give-ups, DVP's etc. Should we lower execution cost less than 1/2 cent a share which also includes all ECN fees? The answer is no unless your pushing serious institutional size. Even then we may not lower fees. The process is simple. You trade at IB as if you have an account at IB. If and when you want to transfer the position to your prime broker, you initiate a DVP.

    from the web site: Institutional customers using DVP receive lower costs and increased trading/margin efficiency if they trade multiple products around the world. Through the IB Universal AccountSM, a customer can trade stocks, options, futures, options on futures, and foreign exchange around the world all from a single account. Customers choosing to keep some or all of their positions at IB will find IB's financing rates to be extremely competitive with other prime or clearing brokers.

    Don't see what's wrong with those terms and why IB shouldn't have money up front if there is no guarantee that the insti executing the trades give the trades up. if you're looking for pure execution to give-up to a clearing firm, DVP is not the choice. You would set up a clearing/giveup agreement and no funds would not be required as IB would purely be an executing broker and the clearing bank would guarantee the trades.
     
    #14     Jul 1, 2003
  5. def

    def Sponsor

    really? what happens when the Prime Broker refuses to accept a trade or sign the agreement.
     
    #15     Jul 1, 2003
  6. They take that risk to get new business. It's called going out of your way to make it right for the customer.
     
    #16     Jul 1, 2003
  7. Nordic

    Nordic

    JT,

    Would it possibly state in that one page agreement that the Prime Broker has the right to "not affirm" the trade? Who then owns that trade?
     
    #17     Jul 1, 2003
  8. def

    def Sponsor

    that's great until the client executes a large order, the prime doesn't take it and the executing broker is sitting on a multi-million dollar loss. can't happen - I know of at least one firm in europe where it has.
     
    #18     Jul 1, 2003
  9. def

    def Sponsor

    the standard 1 page agreement will most certainly state that.
     
    #19     Jul 1, 2003
  10. Ebo

    Ebo

    Keep it simple.
    Open an acount with GS Prime Brokerage.
    Nobody will get hurt.
    It is the old Spear Leeds Operation that they bought.
    Do not dick around with any other operation.
    You can be as big or as small with them and customer service is fine. I used them when it was SLK and GS with 10 to 1 buying power for my personal trading account and had a Prime Brokerage account for another fund I co ran in a DVP account.
    You have every choice of platform to execute and they will clear all your FUTURES and EQUITIES business.
    I do not think GS is going out of business anytime soon.
    I have nothing to gain or lose by using them.



    ebo
     
    #20     Jul 1, 2003