when choosing an FCM, the balance sheet is important to ensure that FCM is not blown out by a few traders lack of risk management, regardless of how good the FCM's risk management will be... feel free to compare and see for yourself, I am not advising any specific company... you can pick from the bottom of the barrel or from solid balance sheets... http://www.cftc.gov/MarketReports/FinancialDataforFCMs/index.htm
and in case this thread is deleted, as my comments were in other threads... do your due diligence people... balance sheets matter... stay away from those FCM's with tiny balance sheets in proportion to the number of seg assets for customers... it is easy... just go to the CFTC site... http://www.cftc.gov/MarketReports/FinancialDataforFCMs/index.htm http://www.cftc.gov/MarketReports/FinancialDataforFCMs/ssNODELINK/293
crossland is a member of CBOT and their customer asset is only $85 million. I would stay out. Potential next clearing to go down. No wonder crossland is offering low commission rate and targeting small traders, they are getting desperate. Any clearing firms targeting small traders offering low commission rate are at high risk because small traders do not know how to trade. Clearing needs to bring in more new small traders to make up the bankrupted small traders. Sort of like a ponzi model. When the exchanges volumes are at the lowest points, clearing firms that target small traders offering very low commission rate will be the first to go. More than 90% of small traders lose! They just lose! Geez, what were crossland doing when MFGlobal's institutional clients or big clients went to other clearing firms. The answer is, crossland was focusing on getting small traders. That is what i call a loser
LMAO... dood... really? I think your argument lacks some validity overall... hmmm... first off... CRS is headed by the guys who created Advantage long ago... their group split up due to differences from what I know... second... they cater to floor guys and professionals first... not really the "small trader"... going direct requires more money than IBKR... oh, and btw.... they happen to have a floor as well... so if you are a local or trade locally in CHI, you can lease desk space from them and trade from their location with other upstairs traders.. (who actually make money!)... you are confusing what DDT does, which is focus on small traders and that is where Howard excels... by offering great service.. with what CRS does... lastly, in terms of Balance sheet... theirs is still stronger than 80% of the small FCM's and even some large FCMs in terms of % of excess capital to customer funds... if I was a small trader, which I am, and I was to pick an FCM for the first time, I would pick Dorman/CRS combo if I focused on futures only... (I dont put all my eggs in a single basket)... again, they dont offer hand holding... they dont care if you trade 1 lot or 1000 lots... if you can show your volume, you get lower costs (that is just business) ... they dont pressure you or hassle you much... they leave you alone to do your business given they are an intermediary... as they should be... but wait... if we go by your argument... RJO and RCG have a lot of introducing brokers out there... they are huge FCM's (with weak balance sheets)... and all those Introducing brokers target small traders... the noobs after riches... so in a way, your argument is accurate... just that you have myopia when it comes to what the data shows and decided to pick on a given FCM, or just dont understand the data...
$85 million customer asset and a member of CBOT. dorman has $135 million and a member of CME. Take a look at vision, customer asset $494 million and a member of cme. crossland been a clearing for a long time and able to raise only $85 million. Ouch, no big clients/institutional clients? sad to see a clearing holds a seat in an exchange is not able to raise more than $100 million customer asset As for DDT is a guarantee introducing broker. DDT is part of crossland. crossland is struggling. no doubt about it. The moment a clearing decides to target small traders, that is a sign of desperate. Like i said, what was crossland doing when MFGlobal went down? looks like vision and dorman took many mfglobal institutional and big clients. what a loser. crossland will go down the same path as velocity. Loser P.S crossland was a respectable clearing firm until they decide to target small traders. Value dropped
any clearing houses hold/owned a seat in any regulated exchanges should have greater $100 million customer asset. otherwise, why would a clearing house hold/owned a seat less than $100 million customer asset? Unless if that clearing house has couple of big clients and is ok with limited income. But if a clearing house holds a seat and has less than $100 million customer asset and promoting heavy on small traders, the clearing at a high risk of going down with limited saving. with limited income and saving, clearing house doesn't have enough money to upgrade high cost of technology. tsk tsk tsk. shame on you crossland http://www.elitetrader.com/vb/showthread.php?s=&threadid=264889&highlight=crossland a sign of struggling. perhaps, crossland figured out promoting heavy on small traders was a bad idea
I agree with a lot of the points you are making, but I also think you are not seeing the complete picture of how to determine what the right FCM for one might be... so I will write a detailed view of how I think one should evaluate FCM's based on a all factors and depending on one's perspective or trading ability... stay tuned.... gotta deal with a boiler issue at home right now...
When was the last time a FCM went out of business from client's trading? ?The recent problems at FCMs were all from illegal activities and firm trading, not client trading. Margin requirements from the futures exchanges has been sufficient to cover counter party risk and client losses. I would be concerned with any firm that offer very low commissions. The total capital base vs client funds is not so important to me. MF global was quite large. A well run FCM with no trading desk can be safe with a lot less then $100M. 1245