I'm looking for a futures broker to trade the E-mini Dow (YM) and ProSpreads are one of the brokers I'm considering. However, in spite of the pro's in ProSpreads (which I accept are good), the con's strike me as being considerable. The issue - as ever with SB companies - is the dreaded spread. Here's my take on the situation. If I'm wrong - or I've overlooked anything - please correct me . . .
As I understand it, ProSpreads add in a fixed number of points to the spread which varies according to the underlying instrument. "0-200 Spread: This is the fixed spread charge that is added to the underlying market spread to produce the ProSpreads spread bet price. For the first 200 lots (where I lot = minimum stake size) traded in any one month, across all products)." In the case of YM, it's 2 points for the first 200 contracts traded. This equates to $10 per contract. So, suppose I average 5 trades a day of 2 contracts each (or 10 trades of 1 contract), I'll pay $100 per day in 'commission' (via the spread) or $2,000 per month. To receive the 'discount' of 1 point instead of 2 being added to the spread, I'll either need to do more trades per month or add more contracts. When viewed this way, the deep discount direct access brokers suddenly look very attractive, especially when one considers (as has been mentioned already) that ProSpreads don't offer any kind of charting package. So, anyone who needs one (as I do), will have to source that elsewhere at additional cost. Perhaps my maths is wrong or I've misunderstood something but, at the moment, even allowing for the tax free status, I'm not convinced that ProSpreads are a very economical solution.
Thoughts anyone?
Tim.