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Hello realtraders,
Going into 2000 - after reviewing different brokers / clearing firms
performance this year. It was discovered that over a typical 30 day
period between our best broker / firm and the next there was over
1000.00 dollars difference in the fills, on a one lot basis.
The best broker / firm that we found was not a big clearing firm, in
fact its an IB. I had reservations about even doing business with just
an IB, when I have typically dealt directly with larger clearing firms
and their floor institutional order desk. I was very reluctant to give
and IB or any IB a chance to get any of my business simply because I
knew I would probably pay more in commissions using an IB.
However as was discovered the few dollars that we were paying in
commissions were a drop in the bucket when compared to the better
execution prices we received. I was frankly not an easy sell to move
any existing business to try out yet another firm. But so convinced
was this broker that he could give me better service that he with his
own money opened an account and personally became a client. He was
determined to overcome the perceived handicap I had heaped upon him,
and he did make a believer out of me.
The primary differences I belive we received better executions with
this particular firm is that the broker is actually himself
participating with what the trading company is doing. I can tell you
this - when I called him at anytime he knew exactly what the current
PL of the positions were. That's a strange experience to have a broker
acting as a realtime portfolio PL machine.
The moral to this story is that "GOOD ORDER EXECUTION" is more
important than commission cost. AND! It helps to have a good broker
who is supported by a good firm. Those are primarily going to be found
to be run by people who have years of experience in the industry. This
whole industry could benefit from having more longer experience
participants on both sides of the fence, that's client and server side.
Happy New Year and remember to not let a couple of dollars in
commissions cost you thousands in slippage. Find a good firm who knows
you as a person and not just as an account number.
Mark
.o©º°¨¨°º©[ WWW.MARKBROWN.COM ]©º°¨¨°º©o.
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