Clearing Alliance cut Eurex fee's to €0.48c roundtrip

[Directional]

I just heard that the Traders Clearing Alliance will be introducing a new, reduced Eurex commission rate of 48 euro cent per roundturn trade regardless of volume... thats a reduction from their previously pretty amazing member rate of 54c RT.

Alliance volume has risen to the point that Fortis have made a further reduction which gets passed straight on to the TCA member traders... guess this is where they start turning the heat up?!

As more traders join the alliance, its just going to get cheaper and cheaper to clear with them!

 

[alpha_monkey]

I just heard that the Traders Clearing Alliance will be introducing a new, reduced Eurex commission rate of 48 euro cent per roundturn trade regardless of volume... thats a reduction from their previously pretty amazing member rate of 54c RT.

Alliance volume has risen to the point that Fortis have made a further reduction which gets passed straight on to the TCA member traders... guess this is where they start turning the heat up?!

As more traders join the alliance, its just going to get cheaper and cheaper to clear with them!

That is great news.
I think some phone calls are in order.

 

[jondoe]

Wow, so it is €0.48 per round turn including all exchange costs and LCH costs?

Who would be the best person to get in touch with over there?

 

[Directional]

yep, flate rate, 48c RT all exchange fee's and clearing costs included.

The guy who's heading the Alliance up is a chap called Steven Davies, probably the man to get in touch with.

 

[Anonymous]

What amount of capital is a member there allowed to trade?

 

[Directional]

Do you mean total leverage or minimum account size?

I dont clear with the alliance yet unfortunately so probably cant answer either question

 

[jondoe]

I can't seem to find any contact details on the web, can you help?

 

[Directional]

yep, their details and most of the other arcades out there are in the Arcade Directory in the Traderpedia.

http://www.the-tca.com

 

[Anonymous]

It looks attractive. Any real life experiences to share about the Alliance?

 

[Directional]

I went down to see them just a week ago. They are based in a nice office alongside Fortis on Bishopsgate, just down the road from Refco. This is obviously a new setup since no-one has implemented an "at cost" idea like this before, they launched in the summer.

Got the impression they have been generally making a low key launch while they build their membership and volume levels to the point where the rates Fortis give them start to become unbeatably competitive... looks like they are at that "critical mass" point now, and as more traders join the alliance, the rates go down yet more.

Plenty of room for expansion too - they have a second office area set aside which is HUGE - easily fit 100+ traders in there.

I plan to move my trading there at the earliest opportunity.

 

[Anonymous]

Any idea what are their yearly costs and member ship dues?

 

[jondoe]

Looks great, one thing I would like to know is if they are in Fortis' offices how can they negotioate better rates with different clearers, not that this is a problem becasue they are low enough already. Also do they have their own IT staff and support or do they use Fortis'? Do they have someone who runs the operations and the day to day admin?

 

[Anonymous]

I find the "owned by members" idea most attractive.

 

[TWI]

Looks great, one thing I would like to know is if they are in Fortis' offices how can they negotioate better rates with different clearers

If you have enough volume ~1mln lots/month any clearer in the city will set you up in nice office space for your business. If Fortis do not remain competative then these guys will no doubt just move elsewhere. Fact is, Fortis know this so will always compete providing the volume is there and the alliance are paying them desk fees so justifying the office space.

 

[Parky]

Can you tell me, Do TCA hold client funds? Its a little confusing as they are not on the FSA register so technically they cant. What happens if a trader looses money? If they are trading at cost they can never build any capital which means they have no contingency if things go wrong, how do they pick up the losses? Remember Griffin? They had loads of locals trading and no real balance sheet and all the traders lost money. Now at ICA, much like the TCA website, they claimed everyone had the protection of a high value GCM but they didnt because they contracted with ICA who in turn contracted with the clearer. In short ICA had the protection not the traders and their all the traders got wiped out. Sometimes cheap commission is the least of your worries, If you loose £ 20,000 because the company you are with is financially insecure thats alot of round trips you have too do to make up for it if you are only saving £ 0.05 per lot for example.

 

[Directional]

with properly handled risk management, no trader should be able to blow up his account and take an arcade down with them.

 

[Parky]

??? Risk management systems on most front ends, if properly managed reduce the risk they sure dont remove the risk altogether.
Do TCA then offer no leverage?
Do they restict traders by forcing them to have stops and not allow trades into the order book?
They would be the very first to have zero risk how have they managed that?
Any high volume or experienced trader would know that this answer just dosent fly. Risk is part and parcel of futures trading and no front end trading system or market offers zero risk or has a risk system that offers this.

 

[jondoe]

surley if you joined TCA and became an own account trader the funds deposited will be segregated? And I would have thought Fortis give some kind of leverage on your funds wouldnt they????

 

[Parky]

No. Segregation is only designed to protect clients from the clearer folding in a Barings type senario.
It is not, nor has it ever been designed to protect trader A from trader B.
All client funds are in one pot, so if TCA hold its client funds at Fortis, then Fortis see one pot of money, they dont care if one trader at TCA is up £ 50 k and another down £ 40 K as long as long as the net is up. But as a trader you have to be worried. As any Compliance officer will tell you your only real protection is the balance sheet of the company you are clearing.
If you are clearing company that has only small balance sheet and are not making any money to build or strangthen that balance sheet you must be worried surley. Look up "Griffin", an FSA regulated entity offering segregation and only clearing client business. One trader blew up and every client they had picked up the tab because the loss was bigger than the balance sheet of the company. They were segregated!!
Yes all clearers offer leverage to varying degrees, Fortis will offer this to TCA and one presumes they offer this to the traders but by definition leverage equates to risk, the more leverage the more risk.

 

[bundbaby]

Sounds EXTREMELY RISKY - you should demand your funds are safe from another traders losses!!!!!!!!