Retail or Clearing

Discussion in 'Retail Brokers' started by romik, Mar 27, 2006.

  1. romik


    Any advice on specific benefits using a retail brokerage firm, compared to trading direct through a clearing firm?
  2. How do you trade directly through a clearing firm? Is there any benefits to doing that?
  3. romik


    from what i can see, you'll have no broker assist service, nor you will have low margins as you would with retail, but from keeping funds safe, doing it directly through people like RCG seems like an advantage to me.

    Anyway, i dunno really, that's why I am asking for advice here.
  4. So would the clearing firm provide you with the order entry software to send trades to them or something?

    Just confused at how it works.

    Regardless, it probably requires a lot of capital contribution to do this, i was just curious because never heard of anyone doing it before.

    I found this post:

    Might be of some use to you.
  5. romik


    Well, again, don't quote me on this one please. If you go directly through a clearing firm, you'll get a choice of software, from J-trader to X_Trader, commissions are almost the same I've been told, dunno about account minimums, you'll have to be self-directed (no broker assistance), no low $500 margins I believe (though NOT SURE), no middle man (broker) - there has to be some saving/benefit there maybe...

    One pro trader has suggested going directly through a clearing firm, due to uninsured funds issues of futures brokers.

    Dude, I am just as confused as you are at the mo :)

  6. galiano


    Look for guaranteed IB... theres extra layer of protection. If IB goes under clearing firm guarantees funds. If clearing agent goes under guaranteed IB funds are in line, maybe not first in line, but in the line.

    Seems best of all worlds in futures. A BIT more safety of funds, and spiffs of retail like low margins.
  7. romik


    Also, I can't understand how can retail firms offer $500 ES margins, when CME is quoting maintenance margin around $3100. Are retail brokers filling your orders in the market at all?

    EDIT: I don't really care whether they lay it out in the actual market or play the averaging game of losers vs winners, as long as I get paid. And that is the real issue here. How safe is my money with these guys?
  8. galiano


    Accounting at exchange is at nite. Open trades are based on rth session close.
    No exchange regulations exist for INTRADAY margins... could be 0 if your IB/broker agrees!

    Either IB or individual broker is responsible for debits. That's why newbies and smaller accounts might not get low margins. And low margin intraday has max position, usually 20.
  9. romik


    i have a bit more in the account than the minimum requirement and therefore a bit concerned that the funds are not insured, I mean if the funds are held in the clearing firm's segregated account, does that mean that if the broker goes belly up, my funds are still there?
  10. galiano


    if IB is not the clearing firm. Else REFCO, aka. maybe.

    A Guaranteed IB is best u can do for safety, for futures account.
    #10     Mar 28, 2006