This podcast explores the many components of trading in the commodity futures & options market. From choosing a platform, how to select a broker, what data feed to pick, and how to approach making such decisions that best suit your needs and trading style.
There is a substantial risk of loss in futures trading. Past performance is not indicative of futures results.
Episode TranscriptRead Episode Transcript
Welcome to Episode 4 of the Optimus Futures podcast. In this episode are host Matt Zimberg will delve into the components of trading commodities futures and options. We’ll talk about potential brokers data feeds platforms and how to approach making such decisions that best suit your personal needs.
Please remember that this matter should be viewed as a solicitation to trade trading futures and options involve substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. Optimus Futures LLC is not affiliated with, nor does it endorse any trading system, methodologies, newsletter or similar service. We urge you to conduct your own due diligence.
Have you been looking for practical advice to take your trading career to the next level? Can’t decide on which platform to trade on? Fearful of the current state of the market? Look no further. Welcome to the Optimus Futures Podcast a place to learn from an industry insider with over 20 years of experience in commodity futures and options. Gain insight to the newest technology, platforms risk management, concepts, trading philosophy and advice about the current state of the market. For futures trading platforms, deep discount trading commissions, overnight margins and instructional videos. Feel free to visit our website at Optimusfutures.com. Now here’s your host, independent broker veteran and CEO of Optimus Futures, Matt Zimberg.
Hey guys this is Matt from Optimus Futures. Today I want to talk about the different components that a trader may need to trade futures. I think that the majority of people that approach futures trading are slightly overwhelmed because of the choices of platforms, because of the data feeds the number of brokers, what they offer and sometimes it’s just very, very hard to make a decision. So what I tried to do with potential customers who come to Optimus or even existing customers in helping them to get to an efficient way to trade futures. I discuss what are the different components and why they are so necessary. So before we talk about futures trading let’s talk about music for a minute. OK. So imagine that at this point you would like to go and buy a stereo system. Now you can buy a stereo system for example like Sony or Pioneer or Bose and have all the same components, right, which is probably one of the easiest things to do. You have the amplifier the speakers the CD all the components are just one brand and you plug it in. However as you wish to improve the sound quality of the sound that’s actually coming out of the speakers. One thing you might want to consider is components right. So for example you can buy a component like Macintosh. It’s very well known in the stereo world and you might get some speakers, a different set of speakers that are may be handmade by some expert and so when you start putting those components together you may potentially, I should say potentially, potentially find the sound quality also improves.
So now let’s go back to the futures trading environment. In the futures trading environment again you can get one component. I mean one brand for everything one data feed and platform it’s all the same company. And sometimes that works and it can work really well. However sometimes customers say well you know I love the platform and I love the interface but the speed the slow or they may say you know what the love the speed when I don’t like the way the interface basically is built it’s not comfortable. Some people can say you know what they want order flow displayed in a certain way or the Dome displayed in a certain way. And this is where the different components come in. So for example, you can have a platform out there that you really, really like and then you attach a separate data to it, right. So let’s talk about data feeds out there for futures trading. You have CQG, you have Rhythmic, you have CTX and based on the location of where you live or your requirements, that’s what we do we actually take a platform and we’ll plug in one of those data feeds for you what does it do. One thing that he does is basically it has the ability to route most of the time directly to Chicago.
So a lot of the customers that came to us. Sometimes they trade futures and stocks on the same platform but they’re not because the majority of the firms that are dealing with the stocks they potentially may have a different routing system. So the execution again and I say potentially could be slower for some customers. So we choose a platform which is the interface that the customer is comfortable with. Right. And then we’ll choose the data feed and then we choose the clearing firm. Now the clearing for may matter for different reasons I’m not going to elaborate it here. I usually discuss that with customers individually, but the two key components to remember our platform and data feed. So you have the interface and data fedd. Now are all data feeds equal? Yes and No. They’re all routed to the exchange. But the data feeds that you might use might not use every tick that comes from the exchange, so the average data. Also the data that you might use on a higher latency levels sorry, not lower, but higher latency level and you want might want to reduce that. And that’s what certain data feeds provide. So not only provide the execution but they also provide speed. So talking about data. Okay. So the data provides a number of things data provide, number one it provides the risk management and so you might want to improve the display of your risk management with certain data feeds that also provides the data for execution, where basically you send your trades to the exchange. And it’s also a way to display data for example on charts and dome.
So your question may be well do I need to change. Well that is something that you have to answer. We don’t know but if you feel that the interface is not right for you or you feel that the speed of execution is not fast enough or you feel that you’re not getting all the data that you should be getting then it’s a problem because latency is important. Display is extremely important and you want to work with the display that is comfortable you wanted to work with the display that it’s intuitive and you also want to execute it in a timely fashion. And that’s where we come in or any broker should you know not have knowledge of platforms and data and how to put them together in such a way that it would make your life easier. Sometimes you just have to keep an open mind because when you new to the business of futures you don’t know if you’re getting the best data you don’t know if you’re getting the best execution out there. Now a lot of the times it’s also a geographical location. Sometimes we can do anything if you’re live in the very remote area and the Internet is not stable over there. In reality it wouldn’t make a difference.
But if you live in an urban place and there’s good infrastructure you should be getting all the data you should get to a point where you get a very stable environment. Now this is also very important to remember, data feeds could be hooked up to different devices. Let me give you an example so I could provide you potentially with a username and password that you can use on a desktop application that you download, on a web based application, or on an iPhone. All three of them could be the same. So you might want to hook up to your Android when you’re outside of it and look at the positions or monitor the markets. We never recommend trading for mobile unless necessary. But this is what it allows you to do so you can get something that you can apply across all three with the same username password and credentials.
In any case I hope this was helpful to you. I’m always here to advise you on technology execution. I try to keep up with everything that the industry throws at us. And if you think there’s a potential here to improve something for you please get in touch with us. I look forward to talking to you. And this is our second podcast on a Friday right Jake? And fourth overall and second on a Friday. So again I wish you a good weekend. And until the next time, thanks.
Thank you for listening to the Optimus Futures podcast. Subscribe to our podcast on iTunes SoundCloud and Google Play. You can also find us on YouTube Facebook Twitter and Google Plus all under the username Optimus Futures if you have any questions feel free to send us an email to support our Optimus Futures.com or give us a call directly at 561-367-86864. Toll free at 1-800-771-6748. Once again thank you for listening to the Optimus Futures Podcast.
Please remember that this matter should be viewed as a solicitation to trade trading futures and options involve substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. Optimus Futures LLC is not affiliated with nor does it endorse any trading system methodologies newsletter or similar service. We urge you to conduct your own due diligence.