Trading Arcades have had their day

[state]

With a FCM I deposit my money, e.g. £10,000, so I can trade how many s&ps?

What happens if the FCM goes down? Would I lose all my money? My deposit and trading profits in the account at that time? In this situation would I not be better trading from home with my existing UK based long time established and secure clearer?

If this topic has been covered please point me to the post. But I don't think its been mentioned how safe these FCMs are. I've tried to look online but can't find much.

Thanks.

 

[pboyles]

With a FCM I deposit my money, e.g. £10,000, so I can trade how many s&ps?

What happens if the FCM goes down? Would I lose all my money? My deposit and trading profits in the account at that time? In this situation would I not be better trading from home with my existing UK based long time established and secure clearer?

If this topic has been covered please point me to the post. But I don't think its been mentioned how safe these FCMs are. I've tried to look online but can't find much.

Thanks.

£10,000 is approximately $15,000 which would get you 30 or so mini ES contracts ($500 margin per contract). Whether or not you should change depends on how much you are paying at present for commissions/platform/seat etc. I think there are details posted on this thread about the size of some FCMs.

 

[state]

30 s&ps for £10,000 is plenty. It would definitely work out cheaper with a FCM. I am considering changing but am concerned about how safe they are. I don't want to put my money down for the FCM to go bankrupt shortly after and I lose all my money. When was the last time a FCM went under? I've never heard of any standard futures clearer going bankrupt in the UK. A FCM may be cheaper but if its riskier then it's not worth it.

Thanks.

 

[weakpunter]

@state an fcm is a futures commission merchant some of them are huge companies worth hundreds of millions some are worth billions, my fcm has been in business for 83 years they are nfa regulated and are clearing members of exchanges that cater for traders with multi million accounts so the likes of mine or your 10 to 20k accounts are tiny for them , these are huge entities so i wouldnt have sleepless nights

 

[wenzi]

@state an fcm is a futures commission merchant some of them are huge companies worth hundreds of millions some are worth billions, my fcm has been in business for 83 years they are nfa regulated and are clearing members of exchanges that cater for traders with multi million accounts so the likes of mine or your 10 to 20k accounts are tiny for them , these are huge entities so i wouldnt have sleepless nights

FCM's are generally safe in the US. Funds are supposed to be segregated. They do blow up occasionally, and the problem with that is how long do you have to wait to get your money back.

Ont blew up in the 80's and it was months before traders had access to their money, and no client lost a dime.

And my margin for Bobl is 200e although I think that is an insane level of margin.

 

[weakpunter]

Quick update to all who have been reading this thread, My mate has gone ahead and opened up a company in Canary Wharf to service the needs of those whose issues were raised on this thread he is up and running and has traders pluggin and playing already,they also provide reasonably priced office space for those that want to sit with other traders rather than sit remote .
http://www.fairvaluefutures.com/

 

[Trading Spaces]

If the West End is more convenient than Canary Wharf then consider www.tradingspaceslondon.com

 

[Pento]

A few of these DIY arcade operations have popped up recently. Maybe we should create a thread with a list of them like the Arcade List on this site?

I think user meanreversion also has one of these offices

 

[Pento]

weakpunter

Is your mates CAPS LOCK key stuck? It makes the site very uneasy on the eyes

 

[weakpunter]

Pento.

I dont think its too bad, I like the fact its kinda clearer commission platform and margin wise
than a lot of other broker sites ive seen, but I suppose Iam not gonna slate my mate am I lol.

 

[arabianights]

meh, removing this post, was misleading

 

[Pento]

weakpunter

lol obviously you have to support your mate. I like the site on the whole and appreciate the commission charges are clear compared to most others. I just find a mass of text written in caps lock extremely annoying. I must have some suppressed childhood memories about capital letters.

 

[weakpunter]

pento

Lol

 

[just21]

Are fair value futures FSA regulated? Or is this a loophole?

 

[weakpunter]

Because they are clearing through USA clearers if someone is opening a retail account with them they are protected by the NFA and CFTC ,and funds must be segregated with regards to this
which is the stateside version of the FSA.

 

[gmarx]

Are fair value futures FSA regulated? Or is this a loophole?

Ive got 2 accounts with them one is in their prop group for the Bobl which I needed
the cheaper spins for coz I do a few, and the other one is in their retail account for my dabbling in Eurostoxx which is segregated clearing http://www.fairvaluefutures.com/ th...rprise as Iam looked at as a non-US customer.

 

[Parky]

Can we just clear up this issue of segregation as it seems to be lulling lots of people once again into a false sense of security(again).
Segregation does not mean your money is ring fenced, your money is in a segregated "pot" and this is designed to protect against parent failure, that is to say if you trade via an FCM, say ABC Inc and your money is with them and their GCM is Goldman’s for example, and also clearing via Goldman’s is EDF and XYZ then if XYZ blows up then you in ABC should not be effected.
However you are only protected to the balance sheet of Goldman’s, if the losses in XYZ exceeds Goldman’s ability to make good the looses you will lose out.
Likewise if your company ABC has twenty traders and one of them drops is backside and his loses exceeds ABC's ability to make good the loses then you still lose out.
As we stated back in the days of TCA, the only protection you have is the balance sheet of the company you are trading through and their risk management, that is it, the fact that your clearing company may in turn be clearing a huge bank or institution is no help to you at all if your clearer blows up.
Remember Griffin, an FSA registered company with segregated accounts, Mr Park's loses exceeded the company’s ability to cover the losses and everybody lost out, and as stated the money they did get back was a long time in coming.

 

[Parky]

gmarx,
#156 I strongly suggest you talk to your accountant. Whilst it is true an US based FCM would not charge VAT that does not mean you do not need to pay it. It is called a "reverse charge" and VAT falls on you personally.
Otherwise everybody would just take all their services from abroad and the UK would be disadvantaged.
You probably would not get caught but if you did, well we all know it doesn’t pay to upset the tax man.
I strongly advise anyone using an non UK clearing company that doesn’t collect VAT to talk to their accountant.

 

[weakpunter]

Can we just clear up this issue of segregation as it seems to be lulling lots of people once again into a false sense of security(again).
Segregation does not mean your money is ring fenced, your money is in a segregated "pot" and this is designed to protect against parent failure, that is to say if you trade via an FCM, say ABC Inc and your money is with them and their GCM is Goldman’s for example, and also clearing via Goldman’s is EDF and XYZ then if XYZ blows up then you in ABC should not be effected.
However you are only protected to the balance sheet of Goldman’s, if the losses in XYZ exceeds Goldman’s ability to make good the looses you will lose out.
Likewise if your company ABC has twenty traders and one of them drops is backside and his loses exceeds ABC's ability to make good the loses then you still lose out.
As we stated back in the days of TCA, the only protection you have is the balance sheet of the company you are trading through and their risk management, that is it, the fact that your clearing company may in turn be clearing a huge bank or institution is no help to you at all if your clearer blows up.
Remember Griffin, an FSA registered company with segregated accounts, Mr Park's loses exceeded the company’s ability to cover the losses and everybody lost out, and as stated the money they did get back was a long time in coming.

Hi Parky hope your well ..........as we havent spoken for a while!!
You are quite right with regards to your detailing on seg/non seg issues, but at the
end of the day we are all in the same boat together,pretty much, if big institutions blow up everyone gets stung! regardless...... if a big arcades clearer bursts a tyre then any big arcade will be in deep trouble, it is the world we live in , and their are inherrant risks attached in different degrees who ever you go with, with regards to retailing accounts with a large FCM/Clearer I´d wager your funds are safer than with any arcade out there but there you go, with regards to prop then sure balance sheets and proper risk management are vital.........but in todays world getting out of bed seems risky lol!

 

[Parky]

Weakpunter,
I am fine thanks, I hope the markets are being kind to you!
You are right, but I just cannot stand people saying "Fairvalue clear Rosenthal so my money is safe" when it is not true. Your risk is with Fairvalue, Fairvalue have the benefit of the protection of Rosenthal you, as a trader, do not.
If Fairvalue blow up you lose your money plain and simple. I have no idea why the lessons of ICA and Griffin get so easily forgotten, Griffin cleared Fortis Bank, but all the Griffin traders lost money because they had not opened clearing accounts with Fortis, they had opened them with Griffin.
Sorry I will get off my high horse now but it is a trick many smaller clearing companies have used for years, they will look you in the eye and say, "we clear HSBC, Goldman’s, JP Morgan so your money is safe" whilst not a complete lie it is a compete distortion of the truth.
The simple fact is whoever's name is at the top of the contract you sign, that is where your money is, how big is their balance sheet, how much risk are they taking on, would you be better paying a little more and contracting directly with a big bank or institution and do not forget the lessons of the past.