Futures Brokers

Futures Brokers…I got it all wrong

This past January, 2015, I created a spreadsheet of every available retail futures broker, and their corresponding commission rates. The spreadsheet can be viewed here. If you have taken a look at this page, then you can see that I have listed every viable futures broker that I could find, and their corresponding broker commission rates for various instruments.

The creation of this list was quite extensive. It took me nearly a month of hard core research. The purpose of the database was to find the absolutely lowest priced futures commissions. The list started out as being very, very long. However, I removed quite a few brokers. Anyone with an unprofessional looking website with a lot misspelled words was removed. As well as anyone with disconnected phone numbers, email addresses that bounced, phone numbers that just ringed nonstop with no voice mail, no published physical address, etc. To some of you reading this, you are probably dumbfounded to read that some futures brokers have websites littered with bad email addresses, phone numbers that ring into a black hole of no answer’s, published main telephone numbers that are disconnected, webpages of employees that had not been with the company for years, affiliations with FCM’s that had long since closed down. Some of these future brokers had the look and feel of a teenage boy’s bedroom: messy, unorganized, confusing. The obvious vagrants were removed.

The next step in the process was contacting each and every remaining broker and then attempt to figure out whom was offering the lowest possible commission rates. To do this, I created a fictional customer that was looking to open a trading account with $10,000 in starting capital, was a moderately to highly experienced trader, and traded an average of 2 trades each day. I then contacted each broker and requested a quote for emini stock indices, US treasury bonds and notes, crude oil, Euro futures, grain futures, and gold. These are all the most commonly traded futures contracts and so it made sense to focus on the likely tradable product as opposed to including the round turn commission cost of lumber futures.

The results were all over the board. For instance, I would contact a big name FCM (Futures Commodity Merchant) and be randomly assigned a broker that would take me on a pricing odyssey that started at $15 per round turn and then we would haggle and the price ended up at $5 a round turn. The next day, I would call the exact same FCM and use a different name and then be assigned yet another random broker. This broker would start at $8 and we would haggle and he would end up at $5.50 per round turn. These big box brokers might have 50 retail futures brokers that will be randomly assigned as each new customer arrives, and so the customer was really at the mercy of the lead distribution. Of course, all brokers want to make as much as possible, but I wanted to curate a list of the lowest priced brokers. The brokers that do not publish a commission rate, I found to be the most irritating. The brokers that simply publish a rate and are transparent, I found to be the easiest at price discovery. However, its been a few months since I put together the original list…and I went about it all wrong. The focus solely on lowest price was a big mistake.

Experience Really Does Matter

After I published my list of brokers, almost immediately I began receiving phone calls and emails from random futures brokers. One broker complained that his coworker quoted a high commission rate and that he was 50% less and wanted me to change that. Another wrote and explained that his service was being unfairly perceived as high cost, and that his niche was in the auto execution of trading systems and he was “extreme hands on” for all customers. Yet another quipped, “yeah, that broker is cheap, but try calling him at 2 AM, GOOD LUCK!”. Another remarked, “OK sure, but the infrastructure of that broker was developed 20 years ago and trade execution is as slow as a snail”. Another remarked, “that guy has 5 websites and 5 different company names, and he is running it out of his parents extra bedroom”. Another said, “Oh sure, you get that rate, but you have to use that crappy platform with those hidden fee’s”.

For months, I have experienced non-stop quibbling, backbiting, finger pointing, accusation throwing, telephone temper tantrums, cease and desist letter writing, name calling, lawsuit threatening,  and all manner of colorful behavior. And then every once in awhile I would get a random email or phone call from a broker that would ask me questions and challenge my thinking regarding futures brokers.

Truthfully, I have thought of futures brokers as nothing more than electronic gatekeepers that offered me nothing more than access to the electronic market. If I was trading the ES, and broker A was charging .50 cents a turn and broker B was charging .60 cents a turn, then I should trade with broker A, right? Wrong. I got it all wrong. In reality, there is hardly any difference in price between  a broker that charges .55 vs .85, but there can be a huge difference in experience level of the broker. And a broker with lots of experience is immensely more valuable than a broker with nearly no experience. Lets talk a bit about how a broker with experience can save a trader from a mountain of trouble.

optimus futuresOver the past few months, I have had literally dozens of hours of telephone conversations with certain, highly experienced brokers in the futures industry. Their experience and insider information has been invaluable in the writing of my reviews and have provided me much guidance on direction and topics. Not mentioning some of these men and women is terribly unfair, and so once a month I would like to start including the names of some of these brokers that I find to be exceptionally honest and extremely helpful. This month, I would like to talk about Matt Zimberg at Optimus Futures. Matt originally reached out to me via email this past spring. He has been a futures broker for over 20 years and is the owner of Optimus Futures. All I can say is that this guy is amazing. He is an encyclopedia of trading information. Over the years, he has seen thousands of retail customers come and go. Matt does not agree with me on all of my reviews, in fact he claimed that I was perhaps unfair at times. Other times, Matt and myself have totally agreed on some reviews.

Over the past 20 years, Matt has seen every imaginable trading vendor come and go. He is intimately aware of just about every single trading educator on the internet. He even schooled me on several occasions, describing how a certain trading educator had been using different websites over the past 15 years, peddling the same old trading system under different names. Inside information that I could of never found without his help. Truly useful stuff.

Matt is also a damn genius on trading technology. He knows each and every trading platform on the market. He knows which platform performs well in certain situations and which is an absolute dog. He has told me flat out that beginners should stay away from certain platforms because the learning curve to too steep and which platforms are the perfect fit for most traders. Which will save a trader a boatload of software fee’s and which will bleed a trader dry with monthly platform fee’s. Which platform is dirt cheap, is hardly every mentioned in the trading universe, and some of his most successful accounts rely upon it.

Matt knows which platform is great for automated trading, and which is to be avoided. In fact, he has been hounding me to write more on these topics. The current trading universe seems to place Ninja trader as the very center of the universe, but Matt has shown me that the universe is indeed a very large realm and that other platforms make Ninja trader look like a broken down old car. One by one, Matt has been pushing me hard to write about the features of platform A vs platform B, etc. How certain platforms consistently get quicker fills on limit orders and perform much faster, using much less computer resources. There is that saying, “You dont know, what you dont know”. Well, with trading platforms, Matt Zimberg really knows and understands the technology side of futures trading. Since Matt is unbiased, offers just about every possible platform and has worked with thousands of clients, he knows the landscape and limitations better than just about anyone.

What A Successful Trader Really Looks Like

One of the questions that I asked Matt is what does a truly successful futures trader look like? Wow, this question turned into a 3 hour phone conversation. Matt will talk for hours on this subject. He gets animated about it. He goes into detail. He uses analogies. Like an excited love struck teenager, he wants to tell anyone that will listen to what he has to say. The whole time I listened to him, I could not help but think what amazing stories I was hearing. Matt would go into detail about how a certain trader would conduct himself on a daily basis, his whole routine and philosophy. How he dealt with big losing days and how he dealt with big winning days. Stories of traders that had made huge sums and then lost it all, and then made it back. After watching thousands of customers come and go over his 20 year career, he truly understands and knows how the winner operates and conducts himself.

And don’t even get Matt started on universally recognized cliches and supposed tidbits of market wisdom like, “cut your losses fast, don’t catch a falling knife, etc.” He likes to cite examples of very successful traders that did things that many of us consider to be trading blasphemy. Honestly, the amount of useful and proven information that Matt freely dispenses to anyone that will listen is much more valuable than the majority of the trading mentorship programs that I review.

The Little Things Make A Big Difference

Another thing Matt hammered me about is the little things that most traders fail to recognize. One instance, Matt told me about a client that he lost to a competitor over a ten cent differential in commission rate. Matt had already gone as low as he could, but the competitor was willing to work for free. About a month later, the client ended up coming back to Matt. He asked the client why? Apparently the customer had gotten into a trade and then he lost his internet connection. He attempted to call the bone thin discount broker and was met with a voice mail. By the time the customer was able to flatten the trade, it had cost him $500 in losses. That .10 savings ended up costing him a lot more than he had imagined. This situation even inspired Matt to create a short little YouTube video on this exact subject.

Another little thing would be the newbie customer that was day trading crude oil on a small account. Matt knew that the client was a fresh faced participant, the type of person that is unmercifully sacrificed daily to the trading gods. The guy was buying and selling and having fun, Matt was watching and wondered if the customer knew that a heavily anticipated inventory report was coming out in a few minutes. Matt picked up the phone and informed the newbie that something huge was about to happen. The newbie was clueless, but took Matt’s advice and got flat before the report was released. The report comes out and the market went haywire. Sure, the newbie could of been lucky and been on the right side. But as most of us seasoned traders know, the market is a jealous mistress and she gives nothing away for free. Newbies are the first lambs that go to the slaughter. That little bit of caring from Matt probably saved that poor newbie his account.

Yet one more example are the countless customers that mistakenly hold a position past the close. Sometimes a day before the expiration day. Most brokers send out a boiler plate email message, warning the client. However, Matt gets on the phone and starts calling and making a huge fuss until he gets the client on the phone and gets them settled.

And finally, a lot of clients are just plain newbies and need a lot of hand holding. These are the technology challenged folks that can barely check their email. Matt makes sure they are not using a platform that is beyond their reach. And he takes his time and slowly walks the client through the process of opening charts, placing trades, explaining the different types of orders, and other little pieces of advice on how not to destroy themselves on the first day. Matt is the type of guy that I would feel comfortable teaching my mom.

Full Disclosure Of Costs

One of the things I really like about Optimus Futures is that they have a large list of available trading platforms and fully disclose the commission rates. No haggling or BS. You can simply input what you want to trade, the size account, daily round turns, a trading platform, a routing technology, and the pricing calculator automatically adjusts the price with each variable. I really like how its designed. Nothing is hidden and there are no surprises later.

The Matt Z Trading Show

matt zimburg

Matt Zimburg – Optimus Futures

Tired of having zero contact with your broker? Is your broker just a name, phone number and email address? Well, not with Matt. I really enjoy watching his YouTube channels were he talks about various topics that relate to futures trading. Some of these topics include: how to choose a platform, how to improve execution speeds, server-side OCO and synthetic orders, explaining day trading margins vs maintenance margins, tips for automating your trading, futures trading with excel spreadsheets.

In addition to the Matt Z Trading show, there is also a host of educational videos that give in depth instructional information for various trading platforms.

Overall, the Optimus Futures YouTube channel I found to be full of useful information and an excellent resource.

Systems Trading Without The BS

Matt Zimburg Trading BookOne of the things that I am personally very interested in is trading systems. I like trading systems. They encapsulate a piece of logic and attempt to capture and capitalize on an event that, for whatever reason keeps repeating. And trading systems are great because they remove the emotionality from the trading process. I don’t know about you, but when I have a trade on, and when it crosses into the negative by $1,000 then I start to get very antsy, emotional and depressed. I will obsess over the trading screen, watching every tick like an obsessed dog watches his favorite ball. Perhaps my obsessive compulsive eyeballing will someone influence the movement of price. Of course, staring at the screen will divine no additional wisdom or influence over the market, but it feeds my fragile psyche with both good and bad. Truth be told, trading a system is heck of a lot easier than staring at the screen. Sure, you give up “control” for whatever that means, but you also gain something very valuable.

Hi, this is Matt Zimberg. Read my free book on systems trading!

The first thing you gain is piece of mind in knowing before hand what your maximum loss will be on the trade. This way you can psychologically prepare yourself for the inevitable losers that are sure to come your way. You also have some sort of an idea of the systems worst case drawdown, this also provides another buffer to protect the delicate psyche. If the system has a historical drawdown of $15k, well then you know if you hang around long enough, then you are going to experience the pain of it…eventually. Knowing your are going to die is much more comforting that knowing you are going to live forever.

Another thing I live about trading systems is that I dont have to get up at weird hours and wait for something to happen. I can delegate the responsibility out to a broker. And this is where Matt Zimberg at Optimus Futures really shines. If you are into trading systems like myself, then I think you are going to really like Matt’s big fat collection of trading systems that can be found here. The iSystems portal is a central clearing house where trading system vendors can submit a trading system and its automatically tracked and recorded.

The best part is that each system cannot be manipulated. For instance, most system vendors only show you the back tested results that have been optimized. But iSystems is different, the system vendor submits the system and its tracked from the point of the submission. And the best part is that each system shows if live traders are currently trading the system with real money accounts. Sure, its fun watching real traders make money on a live real money account. But its also fun, in a macabre sort of way watching traders get their heads handed to them with a losing account. Sort of like watching hockey just for the fights, or Nascar just to watch the cars fly over the rail and into the net, with perhaps a random wheel getting through and terrifying the poor crowd in the bleachers. I know that sure sounds bad.

Anyway, iSystems is chock full of hundreds of different types of trading systems and its a BS free zone. All the good and the bad is on full display. Have a look, its an interesting portal.

Wrapping Things Up

Whether we like it or not, we need to have a broker. And if we need to have a broker to trade, then I am going to start writing about brokers. Many of you are probably irritated and annoyed that I am writing about such a boring topic. Truthfully, it is not particularly fun to write about brokers. However, some of these folks have been around for a long time, and they have a lot of excellent information and advice to give. In particular, they know what a winning trading account looks like. They know the traders that stick around and consistently make money, they know how they operate and can provide you with helpful information on what trading success actually looks like. In particular, Matt Zimberg at Optimus Futures is a great guy and he really, really wants you to succeed. His success is tied to your success. He will get on the phone and talk your ear off, and tell you everything that he knows, no secrets or BS. In the trading world, finding a person that tells the truth is a rare thing.

Well that’s it for today. Once again, I am going to start writing about brokers that are providing exemplary service, have a great reputation, or are offering something different or game changing. If you using a broker that has changed your trading for the better and you feel like deserves a write up, then please contact me at [email protected] so that I can make sure that they get the recognition that they deserve.

Optimus Futures

 

 

 

 

 

 

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28 Comments on "Futures Brokers"

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David Knight
Guest

Enjoyed reading this about Matt. Thanks Emmett.

Futures Broker Optimus Futures
Guest
Hello Roy, Thank you for the interesting question and the chuckle.What your friend told you ( my opinion) is dead wrong. What you have to stay away from are general statements that are assumptions that have not been quantified. In Essence, if you think your strategy would work better on TF, which seems to have a higher volatility, give it a try and see it’s results. No paper trading, real live capital. Based on that you can make a real decision, and also make real life adjustment to optimize your method. Most traders, even those who do well, feel at… Read more »
Roy
Guest
Hey Matt, Thanks for your contributions here. I am curious of your thoughts regarding trading instruments. I have learned to trade the ES and have learned to live through the stomach wrenching grind while price grinds around making it’s sausage meat of traders. Another trader I met told me- Hey If you can trade the ES and make $$ you can trade other markets a lot easier. So I took a look at the TF and NQ – Is it my imagination that this is a lot easier- Especially for a piker like me? When trading these instruments I have… Read more »
Futures Broker Optimus Futures
Guest
First, I would use free resources such as http://www.cmegroup.com where you can find the contract sizes and learn the tick value of the contracts you wish to trade. Understanding the interaction between buyers and sellers through the auction process will help you understand how contracts act as inventory. http://www.amazon.com/Markets-Profile-Profiting-Auction-Process/dp/0470039094/ref=pd_bxgy_14_img_2?ie=UTF8&refRID=08424M40WKEB0ZMD4FS7 Another book I would recommend is Market Wizards by Jack Schwager. This book is rather old, yet still discuss practical approaches by good traders. I would say that successful traders are also those who are analytical, love to solve problems, and highly disciplined. Thank you, Matt Z Optimus Futures THERE IS… Read more »
Trader2
Guest

Optimus really seems like a good broker. Maybe is really BEST to ask directly and hear it from the horse’s mouth……so, Matt, what manual trading system can a normal futures trader, like us, follow to become profitable…..is it even possible? Or any place (vendor) you can suggest?

Futures Broker Optimus Futures
Guest
Trader2, trading futures is a very hard skills to master, and in my opinion it takes 3-5 years minimum to get a grasp of all the relevant concepts. The idea of “follow” does not work. In essence, if you are looking for a “recipe” to imitate, you will move around from one methodology to another, from vendor to vendor, and then software to software. I would refrain recommending a specific vendor, and instead advise you to focus on educational material that teaches you the foundation of trading, i.e how buyers and sellers interact, and the concept of risk management. The… Read more »
Joe
Guest

Hi, I was wondering what your recommendations are for a brand new trader entering the futures market. where to start? and are there any specific books you recommend reading?

Joe
Guest

Matt
A quick word of thanks for the youtube videos. Just been working my way through them. Most informative and useful. Many thanks!

Futures Broker Optimus Futures
Guest

Hi Joe, Thank you for your kind words, and you are most welcome.
I am dedicated to doing more videos, and I hope they will help you with your trading education. If you wish to have specific topics covered, you can always drop me an email.
Thank you,
Matt Z
Optimus Futures
THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. The high degree of leverage that is often obtainable in commodity interest trading can work against you as well as for you.

Futures Broker Optimus Futures
Guest

Hi Joe, you are most welcome. I am very committed to making more videos, and educate those who are dedicated to trading. You are more then welcome to email me [email protected] if there are specific topics you want me to cover.

Matt Z
Optimus Futures
http://www.optimusfutures.com THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. The high degree of leverage that is often obtainable in commodity interest trading can work against you as well as for you.

Cindy
Guest

I might be interested in switching brokers. But my indies are Ninja dependent – for example I use Bloodhound and several custom indicators I have purchased from vendors. So I guess I am stuck with AMP (or Ninja Brokerage)?

Futures Broker Optimus Futures
Guest
Cindy, I speak to many people throughout the dat about their indicators and platforms. Here are my observations: You have to make an honest and objective evaluation whether these indicators help you. I mean, not just perceived value, but de facto, it helps you increase your equity. You may find that your entire attachment to a platform and/or indicators are just not practical because they do not provide any real value, and just because you paid for them at some point does not mean much. This is just a general statement and it may not help to you. I think… Read more »
Trader2
Guest

Thanks Matt Z,

I”l take a look. So far I’ve narrowed it down to Sierra Chart and MulitCharts, i’ll take some time to check them out. Thanks

Futures Broker Optimus Futures
Guest

We can give you MultiCharts.Net free of charge along with Sierra Chart package three again, free of charge. Also, you can tie your account to both platform so you can trade from both. We hope this will help you with the cost.
Thanks,
Matt Z
Optimus Futures
http://www.optimusfutures.com
THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. The high degree of leverage that is often obtainable in commodity interest trading can work against you as well as for you.

Trader2
Guest

So what platform can get quicker fills on limit orders and perform much faster, using much less computer resources than NinjaTrader? (Probably ALL of them, right? LOL)

But which is really user friendly and great OVERALL and is free?

T

Futures Broker Optimus Futures
Guest
Trader2, there are a number of things you can do in order to control speed on your side. One, make sure you have a fast internet compatible with the data feed that you use for execution. Besides your trading platforms, reduce the number of resources that are open on your computer like Skype(or other chats), emails programs, browsers that stream live info, etc. Wireless connectivity could also affect speed of execution. If cost allows, have a computer dedicated only for trading. As for a recommended software that would be light on resources, consider SierraChart. http://optimusfutures.com/Platforms/SierraChart.php Those who use it really… Read more »
Henry IV
Guest

Hi Emmett, more good stuff, thanks for working on all this and a very nice review of Optimus. Also important I think, is that some brokers offer free data to go with certain platforms that don’t come with data. That’s a huge savings as well.

Futures Broker Optimus Futures
Guest
Third party platform that are broker neutral, do need to be accommodated with executable type data. However, this “free” data feed has execution fee. Each feed has its own cost and it may vary from one to another. Some data feeds allow you to be connected to the same account via separate platforms. Also, there are free platforms that Optimus Futures can provide. Matt Z Optimus Futures http://www.optimusfutures.com THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. The high degree of leverage that is often obtainable in commodity interest trading can… Read more »
Futures Brokers Optimus Futures
Guest
Many of the platforms do not have their own data that could be supplemented with free data. But, “free data” is execution type data and they integrate it into the cost of execution. You can, with some data feeds run them through a number of platforms and tie them all together to the same account. Along with free data, we also supply free platforms. (Sierra, Multicharts.Net, etc). Matt Z Optimus Futures http://www.optimusfutures.com THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN… Read more »
Jordan
Guest

This review definitely had a different feel than most of the other ones I’ve found on this site. I found it to be timely, as I am looking to get into Futures (been trading stocks, options, and currencies for over seven years now), but haven’t settled on a broker.

Since you’re going to continue this series, I’d really like to see you included some specific criteria upon which you judge brokers. I’m sure it would do many of us a tremendous service. Thanks!

Futures Broker Optimus Futures
Guest

Jordan, if you have any questions, whether technical or general, I would be more than happy to answer them.
Matt Z
Optimus Futures
http://www.optimusfutures.com
THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. The high degree of leverage that is often obtainable in commodity interest trading can work against you as well as for you

Futures Broker Optimus Futures
Guest
Hello Emmett, Thank you for your kind words! We hope to live up to the expectations of your writing. The underlying philosophy of Optimus Futures is to take care of those who put their capital at risk. I HIGHLY recommend to use ONLY risk capital when you trade. I will answer any questions your users may have here about our services and technology. Thank you Matt Z Optimus Futures http://www.optimusfutures.com THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. The high degree of leverage that is often obtainable in commodity interest… Read more »
Mike
Guest

Hi Emmett, is futures brokers subject to pattern day trader rule of minimum 25k account size?

David C
Guest

No. .

Futures Broker Optimus Futures
Guest

If you mean like equity trading, then no.
In fact, we offer day trading margin depending on the FCM you use with us.
Thank you
Matt Z
Optimus Futures
http://www.optimusfutures.com
THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. The high degree of leverage that is often obtainable in commodity interest trading can work against you as well as for you

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