Hey guys, I'm looking for a FCM to clear 2.5 million contract sides per year (CME group). Talked to a few and the rates still show too much variance. Some do not seem adequately prepared to support our infrastructure (prefer that we go with one of their bundled services), some also want larger account sizes ($50M) which is not in line with the optimal capital for our strategies. Any suggestions for firms that might target our group of clientele?
Both firms are smaller than what we're hoping to find. We'd form as much as 5% of their customer equity. The market access is also rather limited for expansion purposes (I apologize, I did only mention CME). The other firms that we've approached have a full-fledged prime services.
@ 22K+ contract traded per day, I will assume that you have member rates, and that you are a group and as such can work with the institutional side of the FCM's... given your comments about prime... because comms are not your bulk of cost... I've dealt with Advantage, they can easily go to 10c with that volume... last time I negotiated was over 2 years ago.. not sure what they are up to now.. I've kept them on the list and also RAND... anyhow... your choices are as follows given you dont want to be a large percentage of the FCM customer assets (and I dont blame you...)... depending on what market you are trading, one FCM is better over the other... but that is only after you develop relationships of course.. a lot of the FCM's on the list will use Intro Broker... that is where you will find the variability... hence why it will be best to deal with the inst side if you are a group or whatever... oh, if you do use FCStone... Shepard International is a great intro broker... small outfit out of CHI, mostly deals with locals but has lots of relationships... which is important when you are working on the member lease part ...
Newedge is a good place. We received very competitive offers over them though. Thanks for sharing. I'm unsure how you arrived at 22K+ per day or the list that you've come up with. Why is Goldman lumped with an entire group of retail FCMs? I'd be interested to know your methodology. Most of the names you've mentioned are in fact the ones we're trying to avoid. We've talked to the couple others though. Generally, we don't require an introducing broker unless it's to set up a multi-custody solution.
( 2,500,000 / 220 ) 2 = 22,727 in actuality, there are 250-252 trading days (well, i am using equities anyhow)... but realistically... 220 trading days is a good average to account for disruptions, etc... but if I used 252 that just becomes 19,841 contracts per day... given your 2.5MM sides also, GS is not included, their clearing is... as to why I included GSET, simple... it doesnt take a whole lot to get with their clearing if you have the account you say... btw, you are now contradicting yourself a bit... if you dont want to deal with being a large pct of seg, then your choices are somewhat limited ... you should send a pm to garachen... assuming he still pays attention to emails from this site..
interesting, whenever I've been told sides is just to reflect one side... not both together... 5K RT's are not a lot to be honest... anyhow, good luck with the OP finding a new home that meets his req's...