How to self clear

Discussion in 'Order Execution' started by nitro, Jan 17, 2008.

  1. nitro

    nitro

    In the age of computers, you can have a thousand traders trading for you and I can have ten computers, and I would obliterate in a day the volume that your traders could do in a week.

    It has nothing to do with how many people work at a firm.

    nitro
     
    #31     Feb 4, 2008
  2. man

    man

    you got me wrong i guess. admin, even automised,
    requires attention. and that is scarce in a 2men shop.
    140.000.000 shares a day - goodness, that is a crazy
    figure - need backup, filesharing, accounting ... i do not
    know what. and the more of the chain you are takin',
    the worse it gets. but who am i to tell, i am makin' just
    250.000 futures contracts per YEAR ...

    mind sending me a PM with your sharpe? just to motivate
    me to get into real high freq ... (which i postpone year
    after year) ...?
     
    #32     Feb 5, 2008
  3. man

    man

    that was a funny comment ... i almost feel offended ... :)
     
    #33     Feb 5, 2008
  4. nitro

    nitro

    No offense was meant.

    nitro
     
    #34     Feb 5, 2008
  5. #35     Feb 5, 2008
  6. nitro

    nitro

    #36     Feb 5, 2008
  7. #37     Feb 5, 2008
  8. so is the clearning fee included in the execution price? Cause I have both Genesis & IB and both my fees are "the rate that quote me" + ECN fees + extra money if it is a sell + if routed out, nothing else.

    So what are typical "real clearing fees"??
     
    #38     Feb 5, 2008
  9. nitro- great thread.

    I do not have any experience in setting up clearing operations but I have experience in other kinds of outsourcing work (i.e. Call Center, Data Processing, Accounting, etc.)

    The main items I would add to this thread would be to not forget to include some of the less common tangible & intangible items in the business plan for this project. These items would include:
    -Data Center costs (on-site or hosted)
    -Data Center personnel costs
    -Lean Process Consultant /Process Re-Engineering expert (This is crucial to reduce the number of bodies you need to process any sort of data. Most people try and throw IT systems at this problem and it generally does not work well)

    -Intangible Items
    -Employee Turnover, Hiring, Firing etc.
    -Distraction from what you're good at doing which is trading (For most companies this is the single biggest reason to outsource.)

    All in all most companies know they can do whatever task they outsource for cheaper as there is generally a 20-30% gross margin in outsourced tasks but they still send it out because it is usually a major pain & distracting to set it up & keep it running.

    I would be glad to provide some other examples and ideas on the subject if you're interested but this should be a good general idea.

    Regards,
    Eric
     
    #39     Feb 5, 2008
  10. nitro

    nitro

    Eric, Thanks. I hope people benefit from the exchange.

    We are highly distracted with all this stuff, but I can't emphasize how important it is to get it right. This is the foundation of anything that is to come.

    nitro
     
    #40     Feb 5, 2008