Review of Open ECry (futures broker)

[cooter]

One other thing....

There's an old issue that has resurfaced with this recent release (3.1.1.1) concerning the display of the correct open P/L on the DOM for side-by-side electronic and pit contracts. This value also shows up incorrectly in the open P/L on the Account Summary.

During RTH, when both are trading, the DOM will show the open P/L on the electronic DOM based on the pit quotes - even if you didn't place a pit order. ZBU7 and USU7 are prime examples of this. It also shows in the Account Summary too.

Why?

If the pit contract has different quotes (which is often the case) then this would cause the electronic P/L to show the wrong open P/L, based on the pit contract. The only instance where this might be tolerable is if a pit order was pending or executed on the same side-by-side contract. However, this activity is happening even when no pit order is made, let alone contemplated.

Let's stop and think about this for a second.

You are trading the 30 yr bond electronic contract (ZB). It has a side-by-side fungible pit contract (US) as well. This means that you can open one position on either contract, and close it out on the other, if you like.

With OEC you have the luxury of being able to trade pit contracts via the DOM without having to pick up the phone and call your pit broker. So the DOM for pit contracts looks and feels pretty much the same as the DOM for electronic contract (except that there isn't a price ladder full of pending orders).

If you place a pit order, the open P/L will be displayed on the DOM, in the same manner as an electronic order. Where the contracts are side-by-side, the same open position will be reflected on the other contract, since you can close out the position with either contract.

However, the quotes for each contract may differ, since the pit and electronic contracts are "separate but equal" contracts. So during open outcry hours (RTH), you can have two different prices for essentially the same instrument - one pit-traded, and one electronically-traded.

But what if you are trading electronically, and don't really care about the pit-contract? Well, the open P/L for your trade should be based solely upon the electronic contract - after all, that's what you're trading, isn't it.

Only if you choose to exit your position on the pit contract, should the P/L change if the quote is different.

So, let's say you have an open position on the ZB 30 yr bond electronic sometime during RTH. Say 10 cars. Decent size, right? And the open P/L in the DOM ***and*** Account Summary both show $312.50 (tick value is $31.25/tick).

Whoo-hoo! You think you've got a winner - one tick is better than nothing. Your limit order is hit, and your position is closed. But wait!

To your chagrin, your Realized P/L on the Account Summary is FLAT? How is that?

Turns out that the OPEN P/L you saw was based on the pit contract which was one tick up on the electronic quote. But the REAL P/L for your contract was NOT shown on the DOM or account summary - until the contract was closed, and the P/L was "realized".

It may not be a big deal if you are "nickel-and-dime"ing it one contract at a time, but start pushing a few contracts and this issue could bite you one day too.

[ant]

	Quote:	brownsfan019
	As for the net capital, it is above the requirement set by the CFTC and NFA. I'll email my contact and see what the response is to that number and let you know what I find out.

Brownsfan, do you know what the CFTC and NFA requirement is and what happens when a firm falls below the requirement? I thought the requirement was $1M in net capital and Open ECry has $1.029M according to the link. Anyway, I'll wait to see what you find out.

[ant]

	Quote:	cooter
	One other thing.... There's an old issue that has resurfaced with this recent release (3.1.1.1) concerning the display of the correct open P/L on the DOM for side-by-side electronic and pit contracts. This value also shows up incorrectly in the open P/L on the Account Summary.

Not good! That's worse than TradeStation showing cumulative daily P&L in their Matrix.

[brownsfan019]

	Quote:	ant
	Brownsfan, do you know what the CFTC and NFA requirement is and what happens when a firm falls below the requirement? I thought the requirement was $1M in net capital and Open ECry has $1.029M according to the link. Anyway, I'll wait to see what you find out.

Here is what I found out tonight regarding the capital that is reported on the CFTC report:

We have the same question from most of the larger clients or IBs we are in talks with. We basically keep a bit more than the minimum requirement. We have ready capital in reserve that we can / do bring in to support additional business as required.

Now, I've dealt with this contact since day one of my talks with OEC in considering brining my biz there, so I trust his word. This is not just a regular broker you deal with at OEC.

[brownsfan019]

Cooter - you will be happy to know that OEC is aware of the situation you have outlined here and Rob is working on the fix. It has something to do with time stamps. No ETA given at this point.

[brownsfan019]

	Quote:	cooter
	A few thoughts... A button on the DOM itself to manually re-center would be nice. Something where you could easily turn on and off centering on the DOM itself, without having to mess with the DOM settings dialog.

Cooter - doesn't the 'Go To Last' button the DOM do exactly what you are asking here?






And if you just want to center it manually, you could just turn off the 'Auto Center Price' in the setup:

[cooter]

	Quote:	brownsfan019
	Cooter - doesn't the 'Go To Last' button the DOM do exactly what you are asking here?

Yeah, must have been late at night for me too. Guess it's the placement of where that button is located on the DOM that made me think it wasn't there...

I'm loathe to even think of touching that button though for fear of accidentally sending a market order through - although I suppose that turning the order confirmation back on would alleviate that concern.

[cooter]

	Quote:	brownsfan019
	Cooter - you will be happy to know that OEC is aware of the situation you have outlined here and Rob is working on the fix. It has something to do with time stamps. No ETA given at this point.

Well, "timestamps" seems like a specious reason to me, IMHO, when it's actually the logic of using pit quotes to calculate open P/L on an electronic contract that is the core issue.

[brownsfan019]

I hear ya, it was a late night for me as well. Should have been...

[cooter]

Anyone have problems with OEC and their bracket orders lately?