Every 12-18 months, I tend to research what is out there as my next step. In early 2010 I contacted Barclay's to see if I can tap into their liquidity and it was indicated I need about 2-3M in equity, which I did not have... DB Autobahn was even steeper. Now we have late 2011 and I am armed with better equity and first hand experience of DMA trading using CFH Markets. I talked to some prime brokers to see what is out there, and I am not sure what to make out of it. E.g. I talked to Morgan Stanley and I was not all impressed. Lots of red tape and their cost was not spectacular (1-1.5p on EURUSD, with lots of "let's see how it goes" during the discussion). About 0.5-1M would get me started there, clearly showing the shift in the PB FX marketplace, i.e. making it more accessible to non-institutional entities. Talking to Rabobank FX Prime Brokerage division was more interesting. 0.5M to start, again showing the willingness of banks to take on the new breed of clients. Appears flexible and after the description of my trading style, they agreed that EBS Prime liquidity would be best fit. EBS Prime has decimal pricing (finally!) so that would be OK, but again, spread around 1p. Commission about $6-4 per million, depending on volume. $4 was based on 15 yards or so per month. So my overall cost would be about 1.1-1.2p per EURUSD trade. It is not bad, of course, but it did not left me speechless either. I get similar cost with CFH and Oanda and I can get the size I want (10mio per ticket), slippage is minimal and overall it works for me. Of course, having money with Rabobank in the name of my corporation would be very much welcomed, but both CFH and Oanda have, or will have similar solution. To sum up, I am not completely urged to switch to a prime broker, perhaps because I fail to see the tremendous benefit. Yet it is the next logical step up. But I am hoping to achieve better costs, ideally in 0.8p range, all costs factored in (raw spread + comms). Note: I know that there are brokers who post EURUSD spreads below 1.0, but I am referring to filling tickets of 10mio or more, reliably and with fast execution and preferrably in one price (on top band). It would be good if someone with long experience with Prime Brokers and low cost trading can comment on this? Raven
Did you ask Rabo about SolidFX ? Its a new(ish) multibank-system, where Rabo acts as central counterparty. SolidFX itself doesn't charge any fees - so transaction costs should be cheap. No personal experience with this tho. I have read (in eforex mag, iirc) that Rabobank has the most counterparties on EBS - so ebs though them should be as good as this platform gets..
Raven, dont mean to hijack your thread, but you seem to deal in size and know the business. How big can you trade at Oanda with a strategy that uses limit orders to enter, and a SL loss order combined with a Limit for exit? I have been trading a very simple method using 12 to 20 pip stops and 15 to 25 pip take profit limit orders with them. I trade 2 and 3 standard lots usually, and have never had a problem with them. They fill everything right on the nose, almost like a video game, except that it is for real money. At what size does this become untenable? Will they start hurting my fills or changing my price feed as I get larger. Basically, I would love to be doing 20's and 30's with them under current execution conditions I experience at my current small level. Am I kidding myself, or is that doable? Thanks in Advance, FJMcC