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MB Trading capitalization

  • #1
  • First Post: Jul 31, 2007 1:07pm Jul 31, 2007 1:07pm
Can someone recommend another ECN broker that will accept $5k to $10k account size and is NOT on the NFA Dealer Dead Pool list?

Being under-capitalized (at least according to the NFA) worries me. I know that in day-to-day operations they are not taking the other side of customers orders, but why worry about the hassle of the NFA shutting them down?

Thanks
  • #2
  • Jul 31, 2007 1:31pm Jul 31, 2007 1:31pm
hotspotfx
Take care,Sulz.
  • #3
  • Jul 31, 2007 2:17pm Jul 31, 2007 2:17pm
Quoting audionut
Can someone recommend another ECN broker that will accept $5k to $10k account size and is NOT on the NFA Dealer Dead Pool list?

Being under-capitalized (at least according to the NFA) worries me. I know that in day-to-day operations they are not taking the other side of customers orders, but why worry about the hassle of the NFA shutting them down?

Thanks
LOL.
FXChant Singing the World of Forex
  • #4
  • Jul 31, 2007 2:46pm Jul 31, 2007 2:46pm
"Being under-capitalized (at least according to the NFA) worries me."

Nitpicky point, but.... they're not undercapitalized yet, even if said measure is approved.

I can't help you on the recommendation tho.
  • #5
  • Jul 31, 2007 6:36pm Jul 31, 2007 6:36pm
Quoting sulz
hotspotfx
Sulz, Hotspotfx's FAQ on trading says that THEY are the counterparty to all transactions...

I'm looking for a broker LIKE MB Trading that lets you deal directly with the banks...
  • #6
  • Jul 31, 2007 8:46pm Jul 31, 2007 8:46pm
Hotspot is definitely an ECN.

Why they say they are counterparty of every customers' order? Coz they are your principal, you at least need them to pass your orders to inter-bank liquidity pool, to get your orders filled at the best executable price. That's the meaning of counterparty.

regarding to "MBTF is under-capitalized " issue. I suggest you do your own research, like give a call to NFA, type a key-word with GOOGLE, search CFTC's monthly fininancial report. You will get a clear answer.


P.S Are you a Pro trader?
Trading is a business
  • #7
  • Jul 31, 2007 10:02pm Jul 31, 2007 10:02pm
Quoting Changzhou
Hotspot is definitely an ECN.

Why they say they are counterparty of every customers' order? Coz they are your principal, you at least need them to pass your orders to inter-bank liquidity pool, to get your orders filled at the best executable price. That's the meaning of counterparty.

regarding to "MBTF is under-capitalized " issue. I suggest you do your own research, like give a call to NFA, type a key-word with GOOGLE, search CFTC's monthly fininancial report. You will get a clear answer.


P.S Are you a Pro trader?

Yes, the clear answer is that they are fully capitalized and meet all current requirements. Pro traders know.
FXChant Singing the World of Forex
  • #8
  • Aug 1, 2007 1:25am Aug 1, 2007 1:25am
Quoting audionut
Sulz, Hotspotfx's FAQ on trading says that THEY are the counterparty to all transactions...

I'm looking for a broker LIKE MB Trading that lets you deal directly with the banks...
you have no clue if you think hotspotfx is trading against you, they or the ones who settle your trades at the end of the day they collect your money or pay your money to the banks at the end of the day that's what they mean when they say they or the counterpary to all trades.
If I Go Broke Trying Then I Will die happy.
  • #9
  • Edited 4:20am Aug 1, 2007 4:05am | Edited 4:20am
Gee, I'm sorry I'm not privy to the inner workings of Hotspotfx, a company I've never heard of.
Guess my mental telepathy must be broken. Glad you know it all, thank goodness..
  • #10
  • Aug 1, 2007 10:39am Aug 1, 2007 10:39am
Quoting audionut
Gee, I'm sorry I'm not privy to the inner workings of Hotspotfx, a company I've never heard of.
Guess my mental telepathy must be broken. Glad you know it all, thank goodness..
aren't you the one who implied you knew what they meant by their statement when you stated:

Quote
THEY are the counterparty to all transactions...

if you don't know what it means, you can't blame people for trying to tell you (although their tone could have been better about it)
  • #11
  • Edited 11:16am Aug 1, 2007 10:54am | Edited 11:16am
Quoting forexfun
aren't you the one who implied you knew what they meant by their statement when you stated:



if you don't know what it means, you can't blame people for trying to tell you (although their tone could have been better about it)
It seems to me that "they are the counterparty to all transactions" is a pretty clear statement directly from their website... Who wouldn't know what that means? I'm not implying anything; I'm repeating what they themselves state.

Yes, the tone set me off... no need to be rude if what is clearly stated in a way that 99% of reasonable persons not familiar with Hotspotfx would interpret it; sorry I didn't know it meant the exact opposite.. I DO appreciate Changzhou's explanation up above...(and to answer your question..yes I am)
  • #12
  • Aug 5, 2007 8:13pm Aug 5, 2007 8:13pm
here's the latest report, look at mb trading futures.

http://www.cftc.gov/files/tm/fcm/tmfcmdata0706.pdf
If I Go Broke Trying Then I Will die happy.
  • #13
  • Aug 9, 2007 11:19am Aug 9, 2007 11:19am
Quoting Moe
here's the latest report, look at mb trading futures.

http://www.cftc.gov/files/tm/fcm/tmfcmdata0706.pdf
MB's #'s look horrible!...$170K excess net capital
HotspotFX ...over 4 million in excess net capital

I gotta go ECN though. Hotspot FX is $7500 to start (I could barely do that) and EFX (MB) is $400 (I'd probably start w/5K).

If there were big advantages to Hotspot FX I'd probably go for them. I like the customer service of EFX and their new Omega software out soon sounds like my speed. Guess next step would be to download Hotspot's demo.

Moe emphasizes broker financials after all other due diligence is okay.

Fxchant seems to love EFX and sounds more than sane.

...need to decide within a few weeks!
  • #14
  • Aug 9, 2007 12:09pm Aug 9, 2007 12:09pm
Id like to trade with Hotspot, but the way they handle stop and limit orders is horrible. If you search the forums, i have explained else where how they work. Otherwise its a good broker, cheap commission. They have been bought by Knight Capital, i doubt they will go down anytime soon.
  • #15
  • Aug 9, 2007 12:30pm Aug 9, 2007 12:30pm
Quoting shrike
Id like to trade with Hotspot, but the way they handle stop and limit orders is horrible. If you search the forums, i have explained else where how they work. Otherwise its a good broker, cheap commission. They have been bought by Knight Capital, i doubt they will go down anytime soon.
Thanks for the input but its hard to imagine how they could screw up something that simple...but now for sure I'd do the demo b-4 using.
  • #16
  • Aug 9, 2007 3:05pm Aug 9, 2007 3:05pm
Quoting Poocher
MB's #'s look horrible!...$170K excess net capital
HotspotFX ...over 4 million in excess net capital

I gotta go ECN though. Hotspot FX is $7500 to start (I could barely do that) and EFX (MB) is $400 (I'd probably start w/5K).

If there were big advantages to Hotspot FX I'd probably go for them. I like the customer service of EFX and their new Omega software out soon sounds like my speed. Guess next step would be to download Hotspot's demo.

Moe emphasizes broker financials after all other due diligence is okay.

Fxchant seems to love EFX and sounds more than sane.

...need to decide within a few weeks!
Did you consider futures? Same price action, central exchange...
Take care,Sulz.
  • #17
  • Aug 9, 2007 3:29pm Aug 9, 2007 3:29pm
Quoting sulz
Did you consider futures? Same price action, central exchange...
Very different price action for me. Had a losing trade in crude oil today and made 320 pips in forex. Otherwise I'd just go with Interactive Brokers Universal account.
  • #18
  • Aug 9, 2007 3:47pm Aug 9, 2007 3:47pm
Just found this in the EFX thread:

With regards to Saftey of Funds:

MBTF/EFX is insured with a Fidelity Bond 14 from a member company of American International Group, Inc (AIG), which protects the assets of MBTF against loss resulting from fraudulent acts committed by the management of employees of MBTF. In the unlikely case from various types of fraud, theft, or embezzlement the Bond offers the protection up to $1,000,000 per occurrence.

Another feature of the fidelity bond is the 'Forgery or Alteration Agreement' covers loss resulting from forgery of a signature or alteration involving most types of negotiable instruments. Also, losses resulting from written instructions directed towards the insured that have been altered, or bear a false signature, are covered.

However, please be noted that the bond does not insure against risk exposure on market loss.

From an accounting and operating standpoint, customer’s non-margined Forex funds and MB Trading Futures, Inc.’s (“MBTF”) operating funds are separately maintained. MBTF maintains a separate account at Wells Fargo Bank, a federally insured bank, for the exclusive benefit of customers in which Forex funds that are not used to satisfy margin or trading requirements will be deposited for safekeeping. Forex funds that are held in the separate account will not be used in the day-to-day operations of MBTF. While Forex funds are separated from MBTF’s operating funds, they are not segregated as defined under CFTC regulations.

Wells Fargo is a diversified financial services company that provides banking and other consumer related services to more than 23 million customers through 6,200 stores, the internet and other distribution channels across North America and elsewhere internationally. As of June 30, 2006, Wells Fargo had total assets of $500 billion and a stock market valuation of $113 billion.
  • #19
  • Aug 9, 2007 4:16pm Aug 9, 2007 4:16pm
My opinion:

USD 1 mio. doesnt sound too much. If the firm does indeed go down because of a fraud, this will never be enough.

The rest means basically nothing. What they do not mention is: should they go down, then MBTF's futures account customers claims (from mb-trading) will recieve priority("secured creditors") over efx-customer claims. Means, if any funds are left, after the secured creditors get their money back, the rest, if any, will be split amongst the others (i.e. efx-customers).

It is nice that Wells Fargo has $500 bil. in assets, unfortunatly this is totally irrelevant incase of a broker bancrupcy.
  • #20
  • Aug 9, 2007 4:59pm Aug 9, 2007 4:59pm
Quoting Poocher
MB's #'s look horrible!...$170K excess net capital
HotspotFX ...over 4 million in excess net capital

I gotta go ECN though. Hotspot FX is $7500 to start (I could barely do that) and EFX (MB) is $400 (I'd probably start w/5K).

If there were big advantages to Hotspot FX I'd probably go for them. I like the customer service of EFX and their new Omega software out soon sounds like my speed. Guess next step would be to download Hotspot's demo.

Moe emphasizes broker financials after all other due diligence is okay.

Fxchant seems to love EFX and sounds more than sane.

...need to decide within a few weeks!
mb trading has a good business model, i hope they survive, but forex is not there only business so i think there be ok.
If I Go Broke Trying Then I Will die happy.
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