rules for privacy at brokerages?

Discussion in 'Trading' started by qwert, Apr 9, 2009.

  1. qwert


    what rules are in place that stop brokerages from using software to track profitable trading accountants and see what strategies are being used.

    are there specific rules that brokerages have to follow and were can i find the specific wording.
  2. I always wondered this myself. Are they really making their money off of the 50 cents commission each trade?..... hmmm
  3. How does the broker know what percentage of your total trades go through that broker?

    How is the broker going to figure out your irrational strategy from your trades?

    How does the broker know if you are really skilled or just own a dart throwing monkey?
  4. I tend to agree. I don’t think it is really possible to find out what strategies are being used.

    Maybe they could shadow trade someone. Even if they decide to track large and successful account, then these large traders have multiple accounts, plus they also do all kinds of arbitrage and hedging, so it is bit hard to decipher the purpose behind the trades.
  5. broker will blow up if trader blows up. 99% chance of blowing up. No way a broker is gonna do that unless you're Warren Buffett.
  6. You could establish your own clearing entity or broker/dealer if you're really that "paranoid" about others front-running, coat-tailing or piggybacking your trades. :cool:
  7. No need to worry about this until you are swinging at least a substantial 8 figure account.
  8. Traders/Institutions that move around a great amount of capital don't use retail brokers. They would use a broker-neutral execution platform (using FIX) like Bloomberg Tradebook, Fidessa, Reuters Trading, ITG etc. that use anonymous electronic trade matching systems.

    Again unless you have 8 zeros to your account like the previous poster said don't worry about it.

  9. Or just clear through an AGENCY ONLY model, like MF Global.

    Brokers are not legally allowed to front run accounts, FYI.

    Do you think some do it anyway?

    What about the large wire houses that trade their own account, like Goldman or Morgan?

    You're a big hedger & you have to sell 25,000 contracts of July sugar #11. They know this. It puts in a temptation to front run or buy some puts.

    My advice to you is: Don't learn these lessons the hard way.

    KNOW your broker. Go AGENCY ONLY, if possible.

    I recommend MF Global.
  10. qwert


    thanks for responding
    #10     Apr 9, 2009