Recommended Broker for eMini S&P 500 Futures

A few years ago IB did have really low commissions especially for small retail clients... but thankfully, other firms have gotten significantly more competitive.. why? because many of us were willing to put up with IB for their low commission despite their faults... now we have other options.

 

I would stay away from MF Global, just by looking at the price action of their stock, it looks like there could be possible problems down the road if the financial markets get worse.

 

IB has low commissions, but not the lowest. IB could make a major cut in their futures commissions, but they don't.

 

They can't cut - they need money bad to fix their platform and feed. :eek:

 

IB claims to have and most likely does have the lowest costs in the brokerage business. They can easily afford to cut their futures commissions and provide for a redundant data feed. TWS quirks are due to very poor testing procedures, not lack of money.

 

Infinity Futures
http://www.infinitybrokerage.com/

Price Futures Group
http://www.pricegroup.com/

Zaner / netfutures
http://www.zaner.com/

There are many others...

 

http://www.attaincapital.com/newsletters/271


Is your futures account safe with MF Global stock slide today?
March 17, 2008


For hundreds of thousands of futures market investors out there who see MF Global at the top of their daily account statements, today’s market activity provided a little scare.

The scare came from the stock of MF Global (NYSE listed as MF), the largest broker of exchange traded futures and options, which was down nearly 80% at one point today. Rumors started flying that MF global was having a liquidity crisis of its own, and fresh off the heels of Bear Stearns losing 90% of its value in a few short days, short sellers attacked MF Global’s stock. Was this a run on MF Global? Were all of its customers pulling their money? Would this be another Refco situation?

For those who don’t remember, Refco (one of the largest futures clearing firms at the time) saw their entire business unravel in a matter of weeks after their CEO was charged with fraud, causing a crisis of confidence not dissimilar to what just happened to Bear Stearns in which clients started heading for the door in droves, which in turn caused Refco to not have the necessary capital to run its business.

There were a lot of questions this morning surrounding MF Global, and not a lot of answers…….causing more than one of Attain’s clients whose account is held at MF Global to call in asking if his funds were ok.

As we told him, and will tell you - all such futures customers who hold their accounts through MF Global, your funds remain 100% safe, as they are in a segregated funds account at non affiliated banks. Customer funds are not considered an asset of MF Global's, and MF Global can not use customer funds to meet any debt obligations, pay fines, etc.

Even if MF Global' stock went to "0.00" and the firm went bankrupt, the introducing brokers such as Attain who use MF Global as a clearing firm would still be able to execute your trades and your funds would still be in their segregated accounts. I liken it to flying on United Airlines when they had gone bankrupt. The airline doesn't get to take your luggage and sell your belongings to meet their debts, and their planes don't randomly fall out of the sky. They remain operating and servicing their customers.

What Happened?

From what we have heard by MF Global employees, and we can put this in the rumor department until verified, the initial impetus for the MF Global sell off today was a massive unloading of positions by Billionaire investor Joe Lewis.

(...)

MF Global finally did come out with a statement saying their financial position is just fine, thank you, and that Mr. Lewis was not a client of the firm. And then several futures exchanges, including the Chicago Mercantile Exchange, ICE, and NYMEX tried to come to MF Global’s rescue, coming out with statements saying that MF Global (most likely the largest customer of each) remains in good standing and continues to meet all of its obligations to the clearing house.

What if MF Global goes Bankrupt?

As MF Global’s stock swoon today attests to, the chance of any clearing firm going out of business or closing its doors is always present, unfortunately. But the futures industry has been set up to combat the dangers to your account should your clearing firm (or brokerage firm for that matter) go out of business. The secret to protecting your money is that investment accounts are held in segregated accounts. This small distinction may seem obvious, but it is of the greatest importance - as it means it is not an asset of the firm you are dealing with (the clearing firm or your brokerage firm), rather an asset of yours.

The Commodity Exchange Act requires that funds deposited by a customer with an FCM be maintained in a "segregated" account for the exclusive benefit of the depositing customer. The term "segregated" refers to separating the funds of all the customers (treated as a class) from the FCM's own funds (sometimes referred to as "proprietary" funds) which the FCM uses in its own operations.

So that if a firm does go bankrupt - there is no claim on your money. If MF Global’s stock goes to 0.00 and they are bankrupt, they can not pay their debts with your money. They have no access to your money except to post it as margin on the exchange when you place a trade.

Where things get sticky, and where 99% of the problems are in the banking, brokerage, and financial industry is when your money is not in a segregated account. When you write a check to John's commodity fund, for example - the money is then under control of the manager - not you, and it is not in a segregated account. This small point is the most important point in understanding how all this works.

If MF Global were to go bankrupt, generally, in such circumstances, cash in customer accounts is promptly transferred, along with the customers' open positions, to a solvent clearing firm (FCM) even before a trustee is appointed to administer the bankruptcy. After such a transfer takes place, the customer is free to transfer his funds and open positions to the FCM of his choice.

The beauty of the segregated accounts protection, is that it was actually put to the test at the end of 2005, when one of the largest clearing firms in the world, Refco, went bankrupt in the matter of weeks. Attain had hundreds of clients with accounts at Refco, and not one of them lost money or was negatively impacted in a any way (maybe a few nervous moments watching the news). In short, the system worked as it was supposed to, on a grand scale.

(...)

The following link to the National Futures Association lays out some more information on the safety and protection afforded futures based investment accounts:

http://www.nfa.futures.org/investor/Storybehind.asp


(...)

 

with only $20k ,plenty to daytrade,you wont be able to do much in es futures with overnight positions, if u are short 3 at 1330, overnight mrgn might b 13,500,u add a lower bid and a higher offer these wil b baked into your mrgin , something to consider would b calls and puts in the spy, u would get more bang for your buck, es moves 10 points in your favor on a 1 lot,4500 margin,u make $500, u buy a 10 lot of at the money calls, es moves 10 points ,calls move 90 cents , you make $900