Education
Frequently Asked Questions (FAQs)
Questions About Us
Account Questions
Futures Questions
Managed Futures Questions
Forex Questions
BEST Direct Questions
Miscellaneous
- How are you registered and regulated?
- Peregrine Financial Group, Inc. ("PFG") is a registered Futures Commission Merchant ("FCM") with the National Futures Association ("NFA") and the United States Commodity Futures Trading Commission ("CFTC").
- Where are my funds held?
- Regulations governing U.S. futures and option markets require that customer positions and monies be separately accounted for and segregated from the positions and monies of the clearing firm. Such regulations are designed to protect customers in the event of the financial instability of the clearing member through which they conduct business. All client funds are held in insured, segregated accounts at the JP Morgan Chase Bank. Of course, this protection does not cover losses of capital resulting from your trading activity.
- Where are you located?
- Our main office is 190 South La Salle Street, Chicago, Illinois 60603, USA.
- Can I trade stocks with you?
- No. You can trade Futures, Options on Futures, and FOREX with us.
- When I give you information about myself can I ensure my privacy?
- Confidentiality is vitally important to many traders; therefore, we strictly maintain confidentiality at all times. We do not, and never will, sell your e-mail address or any other information. We feel that you should be in control of the information you provide to us. We will only use it in ways that we tell you up front. For example, we might need to contact you if there is a problem with your login. To further protect your privacy, we have designed our system to make your e-mail address unavailable to junk mailers and their automated address harvesting "robots". Finally, no one is able to receive a customer list. Please see our privacy statement.
- What is your minimum account size?
- Online, self-directed and broker-assisted accounts have a minimum opening deposit of $5000. Full-service accounts have a minimum opening deposit of $10,000. Your initial deposit should take into consideration the markets you wish to trade, your trading style and trading frequency.
- How do I open an account?
- Follow the steps within OPEN AN ACCOUNT section. These include printing and signing the general account forms and funding your account. If you wish to get started trading immediately, you will need to send a cashier check/money order or wire funds. Personal checks may take up to eight business days to clear.
- What types of account do you offer?
- You will be able to choose from among the following account types: Individual/Sole Proprietorship, Joint (Tenant-in-Common or Right of Survivorship), Corporate/LLC, Partnership, Trust, Custodial, and IRA. There is an account type for everyone. Click here for more information on the account types available to you.
- How long does it take for an account to be opened?
- Most new accounts are typically approved and opened within 24 hours. However, transfers from other futures brokerage firms typically take about 3 business days to complete — we add your positions and funds to your new PFG account just as soon as they are received from the delivering broker. You can help speed the transfer process by contacting your previous broker and demanding an immediate account transfer.
- What is the fastest way to open an account and begin trading?
- Print out the forms, sign, and fax them to us and fund your account with a bank wire.
- What are the Bank Wire Instructions to fund my account?
- To make a deposit by bank wire (U.S. Dollars):
Bank’s name: JP Morgan Chase Bank, N.A.
Bank’s location: New York, NY.
Bank’s ABA Routing Number: 021000021 (or Bank’s Swift Code: CHASUS33)
Beneficiary Account Name: PFG, Inc. Customer Segregated Funds Account
Beneficiary Account Number: 5330355265
For further credit to: (Your PFG Account Name and PFG Account Number)
- Please consult your broker at PFG if you intend to wire funds other than U.S. Dollar.
- Can I transfer an existing account to you?
- If you already have an open account at PFG, please complete the account transfer form, sign it and fax a copy to our Customer Accounts Department at 1-312-775-3506. Mail the original completed document with signature to:
Peregrine Financial Group, Inc. (PFG)
Attn: Customer Accounts Department
190 South La Salle Street, 7th Floor
Chicago, Illinois 60603,
USA.
- If you do not have an established account with PFG, you will need to simultaneously open an account with us in order to transfer assets to our firm. Please complete our account opening process and include an account transfer form. We will handle the rest.
- Once my account is open do I have to maintain the minimum?
- No. There is no account minimum size to maintain as long as you have enough equity to meet your margin requirements.
- I already have an account at PFG. Can I open another account?
- Yes. To open an additional account — titled identically to an existing account — you simply need to complete our one-page Additional Account Request Form. Contact your PFG broker, by phone or e-mail, to receive a copy of this form. We would be more than happy to send you this form via fax or as an e-mail attachment. It is a simple, quick way to open another account. For faster service, click here for a copy of this form that you may print at your home or office.
- To open an additional account — titled different than current existing account — you will need to complete the appropriate application form.
- Are there monthly or annual account fees?
- No.
- Are there percentages of asset fees?
- No.
- Are there inactive account fees?
- No.
- Are there additional fees for limit orders, stop orders or special orders?
- No.
- Are there additional fees for GLOBEX, ACCESS, or e-cbot orders?
- No.
- Are there additional fees for toll-free phone backup?
- No.
- What are your fees?
- Not every client has the same needs in regards to brokerage services. Due to this fact, we customize rates to meet specific needs. Traders who require full service and the time and attention of a dedicated broker will incur a higher commission rate than a trader who places their trades through our broker assist division. Regardless of your terms our rates are very competitive, and unlike some firms, we do not charge $100 or more for a trade. View our rates by service level.
- Can I earn interest on margin funds?
- Yes, ask us about our US Treasury Bill program.
- What are your margin rates?
- For the majority of accounts, our margin rates are always the minimum allowable by the Exchanges. It is important for you to know that some firms do charge greater then "Exchange Minimum" (which is allowable under CFTC rules), but no firm can charge you less than us.
- How do I make deposits?
- Routine deposits can be made by personal check or bank wire. However, margin calls be made by bank wire transfer.
- Please visit the Wire Request form(s) page.
- Can I authorize someone else to trade on my behalf?
- Yes. You will need to sign a "power of attorney" document, which we can provide to you on request.
- What statements will I receive?
- All customers receive daily statements when activity occurs. These statements detail trade confirmations, purchase and sales, and open positions. The statement also provides the account balance, open trade equity and total equity. Customers also receive monthly statements. If you have Internet access, you can also view your account information online.
- Can I receive e-mail statements?
- Yes.
- How do taxes work for futures and options?
- Individual investors could find a more tax friendly environment for futures and index options, whose gains are taxed at a "blended" rate between the long-term and the short-term capital tax regardless of the length of time the investment is held. 60% of the capital gains in futures is considered long-term and 40% is considered short-term. Please consult your tax advisor for further information.
- Do you accept non-U.S. residents as accountholders?
- Yes, we welcome traders from around the world.
- How liquid are the futures and options markets?
- Futures and futures options trading volume, while cyclical, has demonstrated a steady growth pattern over the past two decades. According to the Futures Industry Association, global trading of futures and options reached a new record in 1998: 1,930,225,775 contracts. This was up 9% versus 1997, and is up over 400% since 1988.
- Which markets can I trade?
- You can trade virtually any market listed on any regulated USA and foreign futures exchanges.
- What are "institutional order executions" and why are they better?
- For the sophisticated futures trader, nothing is more important than top-quality trade executions. Floor brokers do vary in terms of speed, accuracy and quality of the price fills to the customer. The term commonly used in the industry for poor price fills is "slippage". Slippage is the difference between the price at which a trader wants to buy and sell, and his ultimate fill price. Missing a trade (not able to be filled at a limit price) is another form of slippage. Slippage is a cost of doing business and can, at times, amount to many times the cost of the commissions. Slippage can be minimized. This is accomplished by "hand-picking" floor brokers. Through our affiliation with a major institutional clearing firm, we are proud of the quality of fills our floor brokers provide. We use many of the same floor brokers used by major institutions such as large hedge funds and major banks. What this can mean to our customers is improved bottom line profitability.
- Do you offer foreign exchange traded futures and options contracts?
- Yes. All major commodity and financial futures and options available on every major US and International Exchange are offered for trading. Not only are the major US Exchanges supported (the Chicago Mercantile Exchange, the Chicago Board of Trade, COMEX, the New York Mercantile Exchange, the New York Board of Trade), also the minor US Exchanges (Minneapolis Grain Exchange, Kansas City Board of Trade), as well as the major foreign futures exchanges (LIFFE, LME, SIMEX, HKFE, MATIF, Eurex).
- Do you offer mini contracts?
- Yes, we have direct access to all of the major futures exchanges for both mini- and full-sized futures and options. Margin requirements for mini contracts are typically one-half to one-fifth the size of the related large futures contract.
- What types of orders will you accept?
- All types of orders are accepted — market orders, limit orders, stops, good until canceled, FOKs. Unlike some firms, PFG will accept any order the Exchange brokers will accept.
- Do you accept exotic orders such as OCO and SCO?
- Yes at our special orders desk.
- Are there additional fees for limit orders, stop orders or exotic orders?
- No.
- How can I place orders?
- You can place orders via our exclusive Internet based order entry system, or by phone.
- What is the difference between initial margin and maintenance margin?
- Initial margin is the ‘good faith’ deposit required to buy or sell a futures contract. The maintenance margin is the level of deposit that must be maintained before a margin call is generated, assuming there are no excess funds available. The maintenance margin level is approximately 75% of the initial margin and is not in addition to the initial margin.
- Are the quotes on PFG’S site real-time quotes?
- Every PFG accountholder receives FREE, unlimited real-time snapshot futures and option quotes. Most other brokers only give you delayed snapshot quotes — if you want real-time quotes, you will have to pay extra — up to $150 per month extra. Not at PFG. For a real-time snapshot of a single futures contract, try Quick Quote. Or, set-up and save a customized Quote Portfolio, which displays market data on up to 20 different futures contracts simultaneously. And if you are interested in option prices, we give you the ability to display an entire options chain (all the calls or all the puts) on a single screen
- What kind of charts does PFG offer?
- Our Interactive Charts allows you to create personalized charts of all major futures contracts. You can select the type of chart you wish to view: Standard bar, line, curve, and candlestick charts are available. You can choose from a variety of intraday and long-term time horizons, and you will have a selection of technical studies and additional indicators at your fingertips. You can draw trendlines with ease, and you can project support and resistance levels into the future with our Extend Chart function. Use the Zoom function to focus in on particular sections of any chart. Save frequently used charts in your list of favorites. And best of all, our Interactive Charts update automatically without any special requests by the user. All PFG accountholders enjoy free, unlimited access to this powerful trading tool.
- Will I have access to futures market news?
- At PFG, you will enjoy free, unlimited access to real-time Financial World News, the news specialist for the futures markets. With reporters on the trading floors in Chicago and an extensive network of contacts in New York and Europe, FWN correspondents talk and listen to the major players in the trading pits everyday. FWN reporters also focus on how widely recognized analysts view the underlying cash markets and technical signals. Then they quickly transmit what they learn to PFG, so that you understand what’s really behind market moves and can decide how to trade that market. We categorize this information in an easy-to-use keyword format, allowing you to quickly follow news developments in the markets you are trading.
Managed Futures Answers - Back to Top
- What are Managed Futures?
- Managed futures is the term used to describe investing in the futures markets with the benefit of a professional money manager.
- What is a CTA?
- Commodity Trading Advisors (CTAs) are one of the types of money managers in the futures industry. Unless exempt from registration, CTAs are registered with the Commodity Futures Trading Commission (CFTC) and are members of the self-regulatory organization called the National Futures Association (NFA). Thus, CTAs are subject to oversight and monitoring by the CFTC and NFA, and under these rules are required to provide adequate disclosure to the investor.
- How do CTAs make profits?
- CTAs employ a variety of techniques that have been developed and tested in the marketplace to attempt to achieve profits and minimize risks. CTAs can typically trade on technical indicators (price movement, trading volume, chart patterns, and time series) or on fundamental information (supply and demand data). The quality and results of the many CTAs available in the marketplace vary in a range as great as the number of CTAs themselves.
- What are typical CTA fees?
- Typically, CTAs charge a management fee ranging between 1.5% and 2% per annum. In addition to the management fee, a CTA also charges a performance fee ranging between 20% and 25% of any net new profits.
- Why invest in Managed Futures?
- Over the long term managed futures represents a class of "alternative investments" providing valuable diversification to a traditional portfolio of equities and bonds. Additionally, managed futures have been shown to provide returns with little or no relation to the timing and magnitude of the returns associated with traditional securities.
- How do I participate in Managed Futures?
- Most investors have neither the time nor the resources to select a CTA. That is why most investing today in managed futures is done through products and vehicles that are structured to aggregate investor money, delegate advisor selection and provide monitoring by an experienced managed futures intermediary. This is where PFG’s Managed Futures Division adds value to the managed futures investment process.
- What is a Managed Futures Account?
- A professionally managed futures account is a discretionary account you give permission to a CTA to make all trading decisions on your behalf through a revocable power of attorney.
- Is a managed Futures Account appropriate as a short-term investment?
- Quite simply, no. Futures investing is a speculative type of investing. Like most markets, it tends to be cyclical. Additionally, even the most successful professional traders experience periods of flat returns or drawdowns. Consequently, losses will be incurred for those trading periods. The wise investor will remain steadfast to his/her investment plan and not close the account prematurely thereby preventing the account from recovering from those temporary losses in equity.
- Are professionally managed futures for everyone?
- No, they are not. Generally, in addition to having the required risk capital, an investor needs to have realistic expectations about returns on investment, tolerance to temporary drawdowns that inevitably will occur, and acceptance of the reality that the risk or loss always exists.
- How can I open an account and how much money should I invest in a Managed Futures Account?
- Only risk capital should be used in managed futures or any speculative investment. Risk capital is defined as capital that you do not want to lose, but if you did, your lifestyle would not be affected. We recommend that the amount of money you invest depends on your own temperament, financial goals and risk tolerance and should usually be approximately 5% to 25% of your overall portfolio. Each CTA trading program has different account minimums as detailed in their disclosure documents.
- What does PFG add to the investment process?
- PFG has experienced professionals managing every aspect of the managed futures business. With the vast number of futures money managers to choose from in the investment world, it is important that investors place their money with a knowledgeable and experienced organization. It is equally important for investors to have confidence and trust in the track record established bya n investment firm as well as in the individual managing their accounts. We work with only those managers who meet our investment criteria and who have proven themselves capable of managing client assets.
- What is Foreign Exchange?
- The Foreign Exchange market, also referred to as the "Forex" or "FX" market, is the largest financial market in the world, with a daily average turnover of approximately US$1.5 trillion. Foreign Exchange is the simultaneous buying of one currency and selling of another. The world’s currencies are on a floating exchange rate and are always traded in pairs, for example Euro/Dollar or Dollar/Yen.
- Where is the central location of the FX Market?
- FX Trading is not centralized on an exchange, as with the stock and futures markets. The FX market is considered an Over the Counter (OTC) or "Interbank" market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network.
- Who are the participants in the FX Market?
- The Forex market is called an "Interbank" market due to the fact that historically it has been dominated by banks, including central banks, commercial banks, and investment banks. However, the percentage of other market participants is rapidly growing, and now includes large multinational corporations, global money managers, registered dealers, international money brokers, futures and options traders, and private speculators.
- When is the FX market open for trading?
- A true 24-hour market, Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, then London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.
- What are the most commonly traded currencies in the FX markets?
- The most often traded or ‘liquid’ currencies are those of countries with stable governments, respected central banks, and low inflation. Today, over 85% of all daily transactions involve trading of the major currencies, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and the Australian Dollar.
- Is Forex trading capital intensive?
- No. PFG Forex requires a minimum deposit of $1,000. PFG Forex allows customers to execute margin trades at up to 100:1 leverage. This means that investors to execute trades up to $100,000 with an initial margin requirement of $2000. However, it is important to remember that while this type of leverage allows investors to maximize their profit potential, the potential for loss is equally great. A more pragmatic margin trade for someone new to the FX markets would be 5:1 or even 10:1, but ultimately depends on the investor’s appetite for risk.
- What is Margin?
- Margin is essentially collateral for a position. If the market moves against a customer’s position, PFG Forex will request additional funds through a "margin call." If there are insufficient available funds, PFG Forex will immediately close out the customer’s open positions.
- What does it mean have a 'long' or 'short' position?
- In trading parlance, a long position is one in which a trader buys a currency at one price and aims to sell it later at a higher price. In this scenario, the investor benefits from a rising market. A short position is one in which the trader sells a currency in anticipation that it will depreciate. In this scenario, the investor benefits from a declining market. However, it is important to remember that every FX position requires an investor to go long in one currency and short the other.
- What is the difference between an "intraday" and "overnight position"?
- Intraday positions are all positions opened anytime during the 24 hour period AFTER the close of PFG Forex's normal trading hours at 4:30pm EST. Overnight positions are positions that are still on at the end of normal trading hours (4:30pm EST), which are automatically rolled by PFG Forex at competitive rates (based on the currencies interest rate differentials) to the next day's price.
- What is the difference between liquidity and volatility?
- Volatility is a statistical measure of a market's price movements over time. Volatility is high if prices change dramatically in a short period of time.
- Liquidity is a market condition that allows large transactions to be absorbed by the marketplace with little or no effect on price stability. With a daily trading volume that is 50x larger than the New York Stock Exchange, there are always broker/dealers willing to buy or sell currencies in the FX markets, thereby assuring liquidity.
- How are currency prices determined?
- Currency prices are affected by a variety of economic and political conditions, most importantly interest rates, inflation and political stability. Moreover, governments sometimes participate in the Forex market to influence the value of their currencies, either by flooding the market with their domestic currency in an attempt to lower the price, or conversely buying in order to raise the price. This is known as Central Bank intervention. Any of these factors, as well as large market orders, can cause high volatility in currency prices. However, the size and volume of the Forex market makes it impossible for any one entity to "drive" the market for any length of time.
- How do I manage risk?
- The most common risk management tools in FX trading are the limit order and the stop loss order. A limit order places restriction on the maximum price to be paid or the minimum price to be received. A stop loss order ensures a particular position is automatically liquidated at a predetermined price in order to limit potential losses should the market move against an investor's position. The liquidity of the Forex market ensures that limit order and stop loss orders can be easily executed.
- What kind of trading strategy should I use?
- Currency traders make decisions using both technical factors and economic fundamentals. Technical traders use charts, trend lines, support and resistance levels, and numerous patterns and mathematical analyses to identify trading opportunities, whereas fundamentalists predict price movements by interpreting a wide variety of economic information, including news, government-issued indicators and reports, and even rumor.
- The most dramatic price movements however, occur when unexpected events happen. The event can range from a Central Bank raising domestic interest rates to the outcome of a political election or even an act of war. Nonetheless, more often it is the expectation of an event that drives the market rather than the event itself.
- How often are trades made?
- Market conditions dictate trading activity on any given day. As a reference, the average small to medium trader might trade as often as 10 times a day. Most importantly, by not charging commission, PFG Forex customers can take positions as often as necessary without worrying about excessive transaction costs.
- How long are positions maintained?
- As a general rule, a position is kept open until one of the following occurs: 1) realization of sufficient profits from a position; 2) the specified stop-loss is triggered; 3) another position that has a better potential appears and you need these funds.
- I am interested in foreign exchange trading, but would like some additional information. Any suggestions?
- In The Forex Market section we describe the foreign exchange market in some detail. In order to gain a practical understanding of foreign exchange trading, there is no better way than to open a demo account, where you can experience what it's like to trade the Forex market without risking any capital.
- How do I cancel an order on BEST Direct?
- To cancel an order, first left click your mouse on the specific order you want to cancel. Then, right click your mouse and select Cancel or Cancel/Replace. Then, Submit.
- How do I check my positions?
- You're wise to check your positions at all times. A Position Reference area is at the top of the trading ticket for you to view your current positions.
- How do I keep track of my orders?
- At the bottom of your trade ticket is the Order Management section. This section shows all your trades throughout the day. To make it easier, working, filled, cancelled or rejected orders are color-coded.
- I keep hearing about Quick Trade. What is it?
- The Quick Trade ticket is a streamlined version of the main ticket. You use it to trade one specific market at a time. And, you may have more than one Quick trade ticket on your screen at a time. This ticket is geared towards the trader who is in and out of the market multiple times a day. To use your Quick Trade option, simply make your market selection and select Quick Trade from the top menu. The Quick Trade window also shows depth of market for GLOBEX E-Mini, Single Stock Futures and Merchants' Exchange contracts.
- How can I receive the BEST Direct software?
- After you fill out all the paperwork with your broker your account will be processed and entered onto the online system. When this is done, a BEST Direct Customer Service Representative will contact you by phone to arrange for downloading your software. Once you have completed the software download, your Customer Service Representative will walk you through the trading program until you are confident you know how to use it.
- Is there any way I can practice trading on BEST Direct before I actually begin using "real" money?
- BEST Test is a simulated version of BEST Direct that is an exact duplicate of the system you will be using to place your trades online. You may place as many trades as you want FREE for 30 days. To find out more about practicing on BEST Test, click here.
- How does BEST Direct route orders for GLOBEX2 markets?
- BEST Direct sends orders direct to GLOBEX2 via the CME's FIX API connection. For more information, click here.
Miscellaneous Answers - Back to Top
- What book do you recommend for beginning to intermediate futures traders?
- Mastering Commodity Futures and Options by George Kleinman. This book is a beginning to intermediate guide to the futures and options markets written in easy-to-understand language. You can learn more about or purchase the book by visiting www.futuresbrokers.net.
- How can I learn more about commodity futures?
- You can learn more about the markets by visiting our Traders' Information Center. There is also a good online tutorial by the Chicago Mercantile.
- Will a load of wheat, or worse yet hogs be dumped on my front lawn?
- No. We have safeguards in place to notify you prior to a delivery period to insure you will not receive delivery if you do not want to. In any case, delivery is generally by a warehouse receipt and can easily be sold back to the market.
- Are you familiar with Ken Roberts, SuperInvestor Files, Larry Williams, other courses and system trading?
- Yes. The brokers at our full-service and broker-assisted divisions offer a wealth of experience and expertise and are familiar with many trading styles and methodologies. We would be happy to help you implement your trading strategy.