- 1997: Volume 6, No. 5 Broker Service: What Is It? How Do You Get It?

Editor's Note: Declining commission rates, heightened competition have forced firms to dissolve research departments, reduce personnel, decrease the flow of information to customers and even abandon smaller accounts. Customers have to shop harder to find the services they need. Some firms are finding innovative ways to deliver traditional services. The customer who is not afraid of technology will find more resources from which to choose.

You want service? Don't settle for: "Sorry, you only get one question." Hold out for the broker that says: "Just ask. We're here to help you." Or "Mr. Johnson? Here's what's going on in your market today and what you might want to think about."

When you are working with a futures brokerage firm, you want to have the benefit of the most service for the most reasonable cost. Education and information are the most valuable tools that a firm can offer its customers. Your brokerage firm can provide a wealth of information, or can tell you where you can find it. Services you might ask for include:

• Guides to how to place orders
• Pamphlets, newsletters, and magazines
• Computer trading software
• Charting
• Books
• Telephone hotlines
• Online information via the Internet

For example, Refco Private Client Group™ (RefcoPCG) (formerly Lind-Waldock) has developed a guide to easy order placement."Your Order Desk is your constant resource for information," says RefcoPCG's chairman Barry Lind. "If asking questions will help in communicating your intentions, we encourage that."

The "Order Placement Made Easy" is a free guide that was initiated by frequent Order Desk questions to provide step-by-step instructions. It identifies common problems and how to avoid them.

The Importance of an Open Order

If you want your order to be open, specify that. Otherwise, you might find yourself expecting a fill on an order you placed several days ago. If an order is "unable," it is canceled at the end of the day's session.

Mind Your Oats and Beans

When stating the quantity for wheat, corn, oats and soybeans, remember that these commodities are exceptional because they are expressed in terms of thousands of bushels. A single contract consists of 5,000 bushels. So, if you really want to trade two contracts of July Wheat at the Chicago Board of Trade, you should say "10 July Wheat" and not "2 July Wheat." Make sure you're talking in the right terms.

Talk is Good

Good communication is key. A specialized service can include a personal broker to help alert you to changing market conditions and answer questions. Jim Gombas, director of Lind-Waldock's Lind Plus division says they have the trader covered on economic data and government reports, access to dates, projections and actual numbers for all key reports. And, based on the predetermined strategy of the trader, the personal broker can take action in response to breaking market developments.

"You may not have time to watch the market all day or to keep an eye on news as it happens, so to be updated regularly on what is happening and why can be a great value," Gombas says.

Electronic Trading

You will also find that access to on-line order placement systems and computerized trading tools can improve your trading speed and agility.

Your personal computer can become a powerful trading tool with real-time portfolio information, quotes, market news, charting, technical analysis and on-line order entry.

Lind On-Line was among the first real-time, on-line PC-based brokerage. It offers a broad base of features that helps follow the action.

Other on-line features and services available include ongoing interactive discussion and information resources found on some firms' websites, like Lind-Waldock's "Ask an Expert" at www.refcoprivateclient.com. These offer new traders general education about the futures industry and trading, as well as answers to more sophisticated questions.

The Chicago Mercantile Exchange now offers live action on their website. At www.cme.com, you can see the mini-S&P trade real- time, with the best bid, the best offer, the size of each, and the last.

Live audio commentary is available on RefcoPCG's site from the floor of the S&P pit. You can listen to what's going on and who's doing what via the Internet. The live audio was developed as a feature for the customer's benefit.

Education and information will vary for novice versus experienced traders. Barry Lind's "Method Trading" booklet takes that into account. Among the 12 rules primary and fundamental to trading:

• Adopt a definite trading plan.
• If you're not sure, don't trade.
• Don't trade in a market that is too thin.
• Don't attempt to buy the bottom or sell the top.
• You can always sell the first rally or buy the first break.
• Never straddle a loss.

Making the Choice

Value-added features of a broker's business often distinguish one broker from other brokers. While commissions and value for cost vary, many brokers do have an assortment of extra services available.

Half the battle is just knowing what is out there. The other half may be to frankly determine your own needs, with the understanding that every trader is different and has different levels of expertise and experience. Asking questions and working with a firm that is eager to help answer them and supply resources can help get the most for your money.

Mary Black is marketing manager at RefcoPCG. You can get a copy of the "Order Placement Made Easy" or "Method Trading" guides by calling RefcoPCG at 800-445-2000.