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Independents that offer commodities

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Dec 16, 2008 2:29 am

Are there any independents that offer commodities or will allow a broker to trade commodities directly with ADM?  Ideal situation would be to run all business through a dealer and commodities thru ADM as an outside activity.

Dec 16, 2008 3:15 am

Brokersxpress offers the ability to trade commodity and other futures contracts, including options on futures.

Regarding the latter issue of an outside activity, I am doubtful since although commodity futures are not officially securities, the Series 3 is a FINRA administered license. You would need to simultaneously register it which I don’t believe is doable. What is ADM?

Dec 16, 2008 3:24 am

Archer Daniels Midland (ADM) has a nice platform.  I looked at LPL but they seem to treat commodities as a nuisance and do not make it easy.  Have you had good experience with brokersepxress?

Dec 16, 2008 3:50 am

Interactive Brokers and Vision are the only two I can think of in addition to Brokersxpress that offer commodities but I don’t know if you can trade with ADM. Maybe on a give up basis.

Dec 16, 2008 8:31 am

mwage, I’m not with brokersxpress or any indy bd just yet since I’m waiting until March to get the CFP out of the way and then go indy. I have, however, talked to their transition team and asked a few questions. If futures and options on futures are a large part of your business, they would certainly be an appropriate option because they definitely do not see this area as a hassle or side area for which you’d have to go through a lot of red tape.

I asked LPL about this issue and the individual who answered didn’t know the answer, which leads me to believe the business of commodities are done with some degree of difficulty if at all.

Dec 16, 2008 2:03 pm

xbanker, this does not address the situation of allowing the commodities biz to be run directly through ADM. I don't know of any b/d that will allow commodities to run directly with ADM unless it is on a give up basis. ADM had a securities division back in the early 90's but I don't know if that is even around anymore.

Dec 16, 2008 7:54 pm

I suppose I’m not understanding why one would want to do this rather than just consolidate into one platform?

Dec 17, 2008 12:26 am
I set up shop an a RIA for my normal advisory stock, bond , & fund  business.  Then I registered as a CTA and take 0% management fee and a 20% incentive fee monthly with a high water mark.   Clients get charged $6 round trip per contract in the markets I trade direct from the FCM. 
Dec 17, 2008 2:56 am

Thanks for the help, i do appreciate it.  Ideally, I would like to do it all under one platform.  Few offer commodities and those who do seem to make it difficult…compared to ADM.  Does anyone have experience with brokersxpress?  Feedback would be greatly appreciated.

Dec 17, 2008 3:05 am

If you are transactional (stocks, bonds, commodities, etc.) then that would be a good alternative. I use Optionsxpress (BrokersXpress parent company?) and Interactive Brokers for my personal trading accounts. Each has their own positives and negatives. I would contact each and see which one serves the broker best from a back office point of view. My feeling is that BrokersXpress might have the edge there. 

Dec 17, 2008 3:35 am

Again, I'm not presently with brokersxpress and am not going indy until after March, but I would say guys there had the best attitude and actually answered my questions. I was just totally turned off by LPL and Commonwealth when I called to get a few basic questions answered and some piker in recruiting totally ignored my inquiries and started reading from his sheet "What's your trailing twelve and AUM?" I was at least able to get the information I wished from brokersxpress (not ALL of it positive) without pulling teeth.  Most of the other indies I spoke with would answer every question with "that's something so and so will address" or "that'll be discussed later in the recuriting process.  The only real negative I found was the ticket charge around $20 and payout dropped to 70% if you go under 50k in production. You probably aren't looking to go indy if you're in that boat anyway though. I wrote Vision in response to a post on craigslist of all places with a list of questions and none were answered. I received only a form inquiry on my production and type of business. I immediately disqualified them for this reason.

AGE2RIA, can you go over the CTA option rather than transactional commodities business? Do you have to just have your 3 for two years and choose a custodian? Pretty similar to an RIA setup in general? Who is your CTA custodian?