SpreadProfessor Futures Spreads

Discussion in 'Announcements' started by bone, Jan 16, 2018.

  1. bone

    bone ET Sponsor

    Last edited: Nov 12, 2018
    #51     Nov 12, 2018
  2. bone

    bone ET Sponsor

    #52     Nov 16, 2018
  3. Overnight


    I think it is a disservice to the community that you don't mention it also comes in lemongrass and sage scents. :)
    #53     Nov 16, 2018
    bone likes this.
  4. bone

    bone ET Sponsor

    I get asked about trading platforms all the time. Depending upon the client, I just might recommend that they use a charting platform at home but for execution use the FCM's 24 hour execution desk. Sometimes you can lease a platform on a per-trade basis. If you do enough volume, a big FCM might gift you the trading platform.

    But, for those who want to roll their own, here's what I currently recommend:

    The three platforms I can personally vouch for are: CTS T4, CQG Integrated Client, and Trading Technologies with a very important caveat: you have your trading account with a major direct clearing FCM like RJ O'Brien, Advantage, Rosenthal-Collins... (a few others also) and you set up your trading platform using the FCM's support desk. The FCM support desk will set up your platform gateway and fix adapter quite nicely with their own proprietary settings - and that is critical. Also, if you're running a strategy like AutoSpreader, Synthetics, or Algo the FCM support desk will be most valuable. Those IT guys do it for Hedge Funds, Proprietary Trading Groups, Banks, and all types of independent traders. The big Chicago FCM's pay their key IT support people very, very well. They can make or break a big FCM.

    About nine years ago, I had a few very sophisticated clients who were clearing NewEdge and they were running a fairly complex multi-legged inter market spread strategy (multiple exchanges, cash and futures) using CQG IC and they had some problems. Those issues eventually got resolved. The current CQG Spreader Core can leg synthetic spread orders in about a millisecond and it's quite good.
    Last edited: Dec 7, 2018
    #54     Dec 6, 2018
    BAT31 likes this.
  5. bone

    bone ET Sponsor

    I frequently get questions about account equity requirements. My suggestion is to have a conversation with me about your goals.

    My clients are quite varied - CTA's, prop traders, independent traders... I've got clients with $25K accounts and I've got clients managing $200M so there isn't a set answer on account equity I can universally dispense as general wisdom. Depends on the client.

    A client's risk appetite is also a major consideration. Some clients are very "measured" in terms of entering trades; others are much less taciturn. And obviously some products require more margin than others. Many (but certainly not all) independent traders who transition from training to live markets tend to avoid the more volatile names until they build up some account equity and establish confidence with their 'live real money' trade selections.

    Happy New Year to all, and I wish everyone good fortune !
    Last edited: Jan 4, 2019
    #55     Jan 4, 2019
  6. bone

    bone ET Sponsor

    I will be releasing a client webinar this week about using an FCM Execution Desk. This is becoming an increasingly popular alternative for some clients - especially independent traders who have full time professional jobs and circumstances don't necessarily lend themselves to having ready access to a secure PC loaded with an execution platform during their typical day.

    I use a Butterfly Futures Spread and a Condor Futures Spread as examples. We discuss how to word a spread entry order to the broker, and also how to word stop limit orders for the profit target and stop loss levels. Finally we discussed how the filled order will appear on your clearing statement.
    #56     Jan 16, 2019
  7. bone

    bone ET Sponsor

    It would appear that the big commercials and spec accounts are quite actively trading the spread between Sweet (low sulfur content) Crude Oil and Sour (higher sulfur content) Crude Oil. You'll find terribly poor volume in exchange cleared Sour futures contracts, but a thriving OTC swaps market - which precludes most independent traders I'm afraid.
    #57     Feb 1, 2019
  8. Whats are the requirements to trade OTC?
    #58     Feb 1, 2019
  9. bone

    bone ET Sponsor

    For the financially cleared ICE and Clearport contracts it can be millions of dollars. There are plenty of FCMs who won't clear them even if you have the margin capital. It takes a pretty healthy balance sheet. When I traded them as I recall I had something like a $2M daily risk and a $15M stop loss assigned to me by a HF - and I traded modest sizing and the positions were spreads. Commercials usually have pledged bonafides (assets like pipelines, plants, etc.). And I'm referring to the financially settled contracts. There are also bilateral physical contracts that require you to make or take physical delivery or pay substantial liquidated damages.

    Amaranth had $9B in assets, but collapsed on Brian Hunter's massive Natural Gas Swaps bet. (John Arnold at Centaurus took the other side of a fair portion of it)
    Last edited: Feb 4, 2019
    #59     Feb 1, 2019
  10. Thanks for your reply . Your course is on my to do list for this summer
    #60     Feb 1, 2019
    bone likes this.