This is rather interesting thread.
Every 12-18 months, I tend to research what is out there as my next step. In early 2010 I contacted Barclay's to see if I can tap into their liquidity and it was indicated I need about 2-3M in equity, which I did not have back then. DB Autobahn was even steeper.
Now we have late 2011 and I am armed with better equity and first hand experience of DMA trading using CFH Markets. I talked to some prime brokers to see what is out there, and I am not sure what to make out of it.
E.g. I talked to Morgan Stanley and I was not all impressed. Lots of red tape and their cost was not spectacular (1-1.5p on EURUSD, with lots of "let's see how it goes" during the discussion). About 0.5-1M would get me started there, so not too difficult anymore.
Talking to Rabobank FX Prime Brokerage division was more interesting. 0.5M to start, no problem there. Appears flexible and after the description of my trading style, they agreed that EBS Prime liquidity would be best fit. EBS Prime has decimal pricing (finally!) so that would be OK, but again, spread around 1p. Commission about $6-4 per million, depending on volume. $4 was based on 15 yards or so per month. So my overall cost would be about 1.1-1.2p per EURUSD trade. It is not bad, of course, but it did not left me speechless either. I get similar cost with CFH and Oanda and I can get the size I want (10mio per ticket), slippage is minimal and overall it works for me. Of course, having money with Rabobank in the name of my corporation would be very much welcomed, but both CFH and Oanda have, or will have similar solution.
To sum up, I am not completely urged to switch to a prime broker, perhaps because I fail to see the tremendous benefit. Yet it is the next logical step up. But I am hoping to achieve better costs, ideally in 0.8p range, all costs factored in (raw spread + comms).
It would be good if someone with long experience with Prime Brokers and low cost trading can comment on this? What do you think is the best next step? I hope I am not hijacking this thread, the intent is to continue the topic along the guidelines it was started with.
Raven102
