06 December 2011

SaxoTrader : Il Buono, Il Brutto e Il Cattivo

  • My experience with trading systems not extensive. Only able to compare Saxotrader to what I have used before, namely UBS' and ABN's in house systems, MF Global's PATS, Reuters Kondor+ and Eikon.
  • Verdict : 8/10. Meets and exceeds most of my personal requirements although there are some missing features I would like to have.
The Good
  • All in one package (price quotes, execution, charting, accounting, risk management, database). Installation and setup is a breeze. Searching, adding and organizing instruments to preferred order (and instrument fields) on a quotes page is straightforward. No need to run 3 systems (Eikon, Excel and PATS) anymore.
  • Hardware requirements not demanding. Eg able to run ST, Firefox with multiple open tabs, Yahoo Messenger, iTunes, Calibre, Adobe Digital Editions and Foxit all together without any problems on my old HP PC.
  • Trades FX, FX Options, Stocks, CFDs and Futures (but I only do FX and Futures). Futures margins as per exchanges (?), cash FX margins at 1% of nominal (seems a bit too adventurous to me).
  • Online lookup for IMRs, commissions and exchange fees ("Trading Conditions") very convenient.
  • Subscribe and unsubscribe to exchange feeds and news services direct from system, only requires a few mouse clicks. Charges debited directly from account. Free Globex live feeds.
  • Charting mostly adequate (but not exactly the easiest to use).
  • Online database of all trades since inception of live trading. Able to lookup old trades anytime. (With PATS, only can refer to PDF email statements which is a real pain when you need to find details of an old trade). Therefore, also ...
  • able to run Financial Statements for period between any 2 dates easily on demand (Financial Statement = Commissions Paid, Realized and Open P&L, Open Positions, Interest Charges, Dividends, etc). System is good enough for one to do away with keeping own separate spreadsheets, theoretically.
  • Order management - accepts GTCs, If Done Then, and OCOs. PATS was not able to do GTCs, to my great cost at times due to forgetting to key in stop losses.
  • Easy access to Helpdesk via phone and built-in IM.
  • Live mtm and risk measures are, of course, a given. However, what amuses me is that once a position is opened, the costs (commission) of closing that position is immediately provided for by reducing account equity. Useful reminder to force novice traders to factor in costs of doing business and avoid over-trading. Also system generated reminders ahead of contract expiries.
  • No direct charges for access to system (see below). No trading = nothing to pay (vs SGD 34,000 p.a. for Eikon).
  • Activity log shows ALL transactions eg if you bank in a cheque to the account, system informs you once cheque is cleared. If you place or change an order, that activity is recorded. When margin requirements change, activity log informs you as well. Every single cash flow in and out of account is captured clearly by system.
  • Also able to put in request for cash withdrawal directly via system (although I have not tested this myself yet).
The Bad
  • Futures commissions are around US$6-10 per contract which is high (MFG USD 2-3). For me this is not such a big issue as I basically try to catch long term trends on small positions ie infrequent trading = low trading volume. For other trading styles, this could well be a deal breaker.
  • FX conversions are done at +0.5% over the NY close. Seems high to me. (See comment).
  • System is not able to chart spreads between 2 instruments (nor any user defined formula), and no data on bond yields either. The latter matters to me as I prefer to trade bond futures off yield charts. Looking at single contract month price chart is just not sufficient, nor is it the same to trade off a continuation chart with large gaps on active month switch (especially in steep yield curve environment).
  • Multi-currency handling is poor. Option is to either 1. set up multi-currency accounts and choose which account to trade from each time (eg Bunds in EUR account) or 2. single currency account and at end of each day, foreign currency margins incurred are converted to original account currency daily at a spread of +0.5% over NY cut ! [At MFG, accounts are automatically multi-currency and trades are left in traded currency until one decides otherwise]. For this reason, I have decided to stick to trading USD products only going forward to keep things simple. Intra-day trading would avoid incurring this exhorbitant charge.
  • Trade execution interface could be better designed eg different color coded order input screen for buy and sell. Already I have hit the wrong side of a trade 3 times in 3 weeks.
The Ugly
  • System does not facilitate inter commodity spread trades. Worse still - no calendar spreads intra-commodity either. Thus, no calendar spread trades for me from now on (no chart, no direct execution, and presumably no reduced IMR for spread positions hence margin inefficient).
  • Follows that when it's time to rollover an open position to the next active month, one is not able to trade within the 2 outright spreads via the system. Instead, would have to pay 2 spreads with execution risk in time between the 2 trades, or exercise uncommon trading skill in legging the 2 to do better. Am surprised that such a basic tool is absent from an otherwise very well designed system.
Lastly, please God, let there not be a Jon Corzine (= Il Brutto e Il Cattivo) in Saxobank.

Wish List : Would be lovely if they made a Mac version of this.

Addendum 01Feb13 : The web-based version (therefore works on Windows and MacOS),  SaxoWebTrader is very very good and I have now switched over to it permanently. SaxoBank has been constantly working on upgrading their trading platform and the result is a superior refined product. Previously, in the 6 years I had been trading with MF Global, their PATS system was essentially unchanged and unimproved throughout. In hindsight, the demise of MF Global should perhaps not be a surprise given their static business practices and unwillingness to invest in upgrading.


Taichiseal said...

All the systems I have used previously (especially in a banking environment) requires down time at the end of each trading day for an EOD run (revaluation). For PATS, system boots out all users at around 6 am Singapore time every day so there is a need to log back on every day after the reports are run.

No such inconvenience for SaxoTrader. I can log on Sunday night and have system running all through the week to the following weekend. How cool is that!

Taichiseal said...

Have used SaxoTrader system for >1 year now. Just occurred to me that this whole time, there has not been a single occasion when I have had to contact Help Desk regarding bad data prints. Integrity of market data is superb.

Contrast with my years of experience with Thomson Reuters 3000Xtra/Eikon which spills out bad data with much regularity and is not picked up by data integrity team for days on end. Also a torture to call up help desk to request them to amend data outliers because the person on the phone is inevitably some clerk with almost zero market knowledge so with every call you have to conduct a Market Data 101 to TR staff before the problem can be corrected. Useless!

Taichiseal said...

When I first started using Saxobank over a year ago, I had a look at their Saxo Webtrader platform and thought that the SaxoTrader Windows application was much better.

Recently had a closer look again at the web-based platform and am much impressed. So much so that I have now given up using the ST application and am relying almost entirely on SWT web-based platform instead. Much more convenient. It just sits as a tab on my Firefox or Chrome. Good for Windows or Mac.

Am really impressed by the systems development team at Saxo. Good job!