Why The Right FCM Can Accelerate Your Growth In Futures Trading
By Raymond Grignon
The futures industry is a specialized segment of the broader financial markets, characterized by a wide range of participants, including both hedgers and speculators. This diversity creates a variety of business opportunities, drawing the interest of emerging finance professionals. Choosing an FCM as a service provider is an important decision especially for emerging managers seeking to grow their fund and leverage investments accordingly.
Proprietary Trading Platform
An FCM, which operates as an Independent Software Vendor (ISV) of the exchange is a significant benefit to the emerging manager. When a trading platform and API are developed and maintained in-house as opposed to relying on third-party data or routing vendors such as CQG or Rithmic, users benefit from a platform with no routing or connection fees and may have access to a free or significantly discounted API, which may be appealing from a cost-management perspective.
Integrated Front-Middle-Back Office Solutions
Real-time access to account information is important for managing trading strategies, hedging positions, or overseeing managed accounts. Choose a platform designed to provide direct access to middle and back-office data, including profit and loss reports, account details, and trade fills. Seek out an FCM that facilitates internal communication across its client services, trade desk, compliance, accounting, and risk departments to support a consistent flow of information to clients.
Personalized Support
An FCM that is eager to grow is always best for an emerging manager in the growth phase. Find a firm that positions itself as a boutique service provider, assigning each account a dedicated account manager who is a registered Associated Person (AP) of the firm, specializing in futures clearing and execution.
Professional Trade Desk
An FCM with a trade desk staffed with professionals with experience is vital. Trade desks should be available 23 hours a day, six days a week, offering support for order execution and account operation. This can be especially valuable for new introducing brokers or traders who require consistent operational assistance.
Risk Management Tools
For introducing brokers, managing trading activity and risk across multiple accounts can be challenging. Find an FCM, which offers back-office risk management tools with features such as auto-liquidation and customizable limits for individual accounts. These tools are designed to address the differing risk profiles of larger hedgers compared to smaller self-directed accounts.
Organizational Culture
Ultimately, always seek service providers who emphasize a collaborative and solution-oriented culture aimed at flexibility and client support.
Raymond Grignon
Futures Broker
Ironbeam, Inc.
Ironbeam is registered Futures Commission Merchant (“FCM”) providing brokerage, clearing, execution and technology services for Exchange Traded Futures and Option Contacts. We have a robust operational and technological infrastructure to leverage for market connectivity and futures trading. We offer multiple trading platforms and products and have exclusive access to the Firetip trading platform.
