OPTIONS TRADING
The Options Trading Course and Software
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OPTIONS TRADING |
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"Our Broker" The broker is the most important link in your trading business. If you don't have a personal relationship with him you will probably get bad fills and no sympathetic ear when you run into trouble. There are literally thousands of brokers who are eager to take your money, and win or lose they don't care. Because we are aware of the pitfalls of having a bad (or mediocre) broker we are only recommending one broker who is well known to us and is very familiar with the Joe Ross methods of trading. The following are some of the reasons that we use him. t 1/2 margins for fully electronic day trading (others are charging full margins. Also please note that for aggressive electronic traders charges are even less than 50% margin. t No practical limitations on number of contracts. (One of the biggest complaints we hear about from students using other brokers. t Ability to use any platform, electronic, electronic order routing, or open outcry (others are electronic only). t Superb choices of electronic trading platforms – some of the best overall we've seen. t Availability of multiple electronic order routing platforms. t Ability to trade all markets from a single account. (others require multiple margin accounts for various combinations of markets). t Direct Access to all FOREX markets. Now, at last, you can trade the currencies where there is some decent volume. t Availability of Forex Trading with no skewing and no bucket shop. t Excellent service and ability to talk to a "live" person. t Wide variety of acceptable orders. t Better than average fills because of excellent liquidity. t Electronic fills are instantaneous. t Open outcry ordering is through a full-time trade desk. t Really knowledgeable spread handling. t Best fills we’ve seen anywhere for spread trades. t Broker knows and understands spreads and the way we trade them. t As an Independent Broker, our man is able to maintain affiliations with more than one clearing firm. This is a distinct advantage as markets and technology change. We realize that you can find slightly lower rates, but the service may be poor. Our Broker is extremely competitive for high volume traders. A number of brokers require full margins or margins which are higher than the exchange minimum margins. Some brokers require multiple accounts if you want to trade at more than one exchange, or if you want to do both open outcry and electronic trading. With most brokers, "other" fees are added on. Finding someone to speak with when you need such a person can be really difficult with some all-electronic brokers. In particular, if you are day trading, we have not seen any electronic platform that can beat the ones available, for speed, and ease of use. The various platforms allow you to "park" orders ahead of time, so that when you need to execute them, all you have to do is make a single click. When you see the price on your screen, the fill is generally instantaneous. This is due to the fact that you are trading with direct access to the exchange. The screens now show more information than any other electronic screens that we’ve come across. The information available is now approaching the kind of information traders can see when using Level II screens in the stock market. We are getting a lot of reports from traders stating that their broker is front-running their trades, otherwise known as slipping them a tick in, out, or both. If you are slipped a tick on either end of a trade, your true "commission" rate is going to be very high. Also, beware of brokers who low-ball you into a relationship and then start adding all kinds of extra fees. We've been down that road ourselves. You must also be careful that you are not unknowingly trading with a "bucket shop." There are some platforms out there from which you are not really trading at the exchange. Instead you are trading at prices derived in-house at the brokerage firm. They are charging low commissions, because you end up paying the in-house spread. Some brokers are charging lower than exchange minimum margins. They offer greatly reduced margins below exchange minimums to trade the e-minis. These are also bucket shops. You will be trading against the house. Your trades will not be traded at the exchange. The exchange has minimum margins which are much higher than those charged by these bucket shops. That means you lose all the protection of the exchange. The buyer/seller of last resort becomes your broker. If there is a dispute, you have no protection whatsoever. Your dispute cannot be resolved by the exchange. You will be in a dispute with the broker who took the other side of your trade. One last thing you should know about. Many brokers are now offering fully electronic trading at rates of less than $5/round turn. We have seen rates as low as $3.00. But there is a catch. They are using trading platforms which are customized to automatically close your position as soon as your margin is equaled if prices are going against you. They do not issue a margin call, they simply close you out and confiscate your margin. This may sound fair, but think!! A trade going against you might begin going your way on the very next tick after they have closed you out and taken your margin. You are given no opportunity to meet margin and stay in the trade. If you are interested in a referral to our broker and would like to get the Ross Trading preferential rates, please contact me, Alan Parry, and I will gladly send you his contact details.
Wishing you every success in your trading, Alan Parry Derivative transactions, including futures, are complex and carry a high
degree of risk.
They are intended for sophisticated investors and are not suitable for everyone. For more information, please click the link below Trading
Educators, Inc.
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