Review of the Online Futures Broker Generic Trade
A Good Value, but No Frills
There are many online futures brokers to choose from, but comparing brokers has become an increasingly complex endeavor. Comparing the real commission rates and fees to trade futures and options has become somewhat of a quest for the truth in the sea of commodity broker ads. Many firms place contingencies on their offers or entice you with teaser rates.
Generic Trade is the first online futures broker I have seen to create obvious transparency for traders when they go to the company’s website to get more details. The website is basic and straight to the point - no bells, no whistles.
Generic Trade's Commission Rates
Commodity traders love low commissions and that is normally one of the first things they check when they look at an online futures broker. The commission rate is 59 cents per side plus exchange fees and NFA. They provide a link right next to the commission rate to check the total fees on each market.
On the popular E-mini S&P futures contract, the total round turn cost is $3.50, which beats most brokers. However, you do have to factor in the $59 monthly cost if you want to use the Firetip trading platform. Rates on other markets and futures options are also at the low end of the scale compared to other discount brokers. The small retail trader will have a difficult time finding a better commission rate, but large and very active traders can find slightly better rates at a few online brokers.
Generic Trade has two trading platforms available. The first is a web-based platform that is very generic, as many are. It has real-time quotes and charts (must be refreshed) at no cost, news and the normal portfolio information. Trades can be placed and monitored through the online platform. I wouldn’t want to use it to actively trade futures, but I’m told that some active traders like to use it. There is no cost for the web-based platform.
The other trading platform is the desktop version called Firetip. This trading platform works very well and has most of the features traders want. There is a $59 monthly fee for Firetip, which you have to factor into your trading costs. Many brokers charge a platform fee and some waive it if you do enough trades each month. The $59 monthly fee does cover the exchange fees for real-time quotes from the exchanges. That alone can often cost well over $100 a month for multiple markets.
Traders who choose to use the Firetip platform also have access to the online platform. This is a nice feature where you can check futures quotes and charts, get portfolio updates and place trades from any computer with internet access.
This is not the type of firm that offers a great many extra services for their clients. For those who don’t need research reports and trading recommendations emailed to them every day, a firm like this might make sense. I’m sure most online traders will appreciate that Generic Trade has no salespeople, so you don’t have to worry about a broker calling you every day or upselling you to a full-service account.
Generic Trade does have 24-hour support, and that along with good technology and trade execution is probably all that most traders need. Generic Trade has no minimum account balances (to open or maintain), no minimum trading activity and no account maintenance charges. They offer the same rates and services to all clients, which is quite unusual.
From reviewing their website and speaking with Marc Nathan at Generic Trade, I can tell they are trying to do something different. They are setting themselves apart from the competition by offering a straightforward and fair deal to all traders, regardless of account size and experience. In reality, I think they are just getting back to the basics that most un-jaded futures traders would expect.