The introduction of CFDs to private investors and traders just over twenty years ago kickstarted a revolution in the financial markets that continues to this day. Democratising access to markets and products and opening up customer choice, but these ongoing changes are also blurring the boundaries between active retail and professional traders and smaller institutions.
That, in turn, has created opportunities for boutique prime brokers indeed one of the originators of retail CFDs IG Group has been actively marketing and advertising its services in this area during 2020.
Individual traders can outgrow their broker whether that’s because the size of an account and associated counterparty risk, or the frequency of their trading is no longer a fit for that particular counterparty, or because the client requires services and market access that a typical MT4/5 reseller cant facilitate.
Linear Investment is a good example of how a boutique prime broker might bridge that gap.
Linear Investments chaired by Jerry Lees was formed by former bankers from Credit Agricole and Citigroup and has grown rapidly over the last decade and now offers a full range of prime brokerage services across FX equities, ETFs, future and options and CFDs. Its target market has been smaller hedge funds and proprietary trading firms but also to a new group of individual day and high-frequency traders.
Algorithmic trading and coding have become part of many traders toolboxes and they want to find brokers and counterparties who can facilitate their algo strategies, which often need low latency connectivity, direct market access and sophisticated order types, the sort of services that are supported FIX connectivity which Linear offer.
This is a standard communications and connectivity protocol among investment banks and institutional brokerages, but it’s not often made available to individual traders.
Linear Investments also offers connectivity via a host of other protocols and platforms including Refinitv REDI and FIS Sungard.
Linear Investments has access to 25 US exchanges and dark pools and promises no internalisation of trading flows real-time risk management and margining tools, as well as surveillance and compliance services. Alongside a 24/6 trading desk.
Most individual traders won’t ever need such a sophisticated solution as the ones offered by Linear, nor are they likely to trade the volumes required to make it economically beneficial to both parties. But for the growing minority of highly active individual traders, it could be worth exploring your options if you are outgrowing your existing provider.
Linear isn’t alone in offering these type of services but unlike competitors such as IG Group and CMC Markets Linear is dedicated prime brokerage business.
In my experience, it rarely hurts to explore your options if only to find out that the grass isn’t always greener on the other side of the fence, or to establish the volumes, practicalities and costings necessary to make a switch, after all for traders, being forewarned is being forearmed.
With over 35 years of finance experience, Darren is a highly respected and knowledgeable industry expert. With an extensive career covering trading, sales, analytics and research, he has a vast knowledge covering every aspect of the financial markets.
During his career, Darren has acted for and advised major hedge funds and investment banks such as GLG, Thames River, Ruby Capital and CQS, Dresdner Kleinwort and HSBC.
In addition to the financial analysis and commentary he provides as an editor at GoodMoneyGuide.com, his work has been featured in publications including Fool.co.uk.
As well as extensive experience of writing financial commentary, he previously worked as a Market Research & Client Relationships Manager at Admiral Markets UK Ltd, before providing expert insights as a market analyst at Pepperstone.
Darren is an expert in areas like currency, CFDs, equities and derivatives and has authored over 260 guides on GoodMoneyGuide.com.
He has an aptitude for explaining trading concepts in a way that newcomers can understand, such as this guide to day trading Forex at Pepperstone.com
Darren has done interviews and analysis for companies like Queso, including an interview on technical trading levels.
A well known authority in the industry, he has provided interviews on Bloomberg (UK), CNBC (UK) Reuters (UK), Tiptv (UK), BNN (Canada) and Asharq Bloomberg Arabia.
