Curious if anyone has gone beyond the usual Tier 1 LPs for commodities like live cattle or corn futures and what their experience has been regarding fills and slippage, particularly during volatile sessions. The spreads can be brutal otherwise.
This is a great question. I've only ever stuck with the major LPs, mainly out of habit and a bit of fear about going elsewhere. Have you looked into any specific smaller providers yet, or are you just trying to gauge if it's even worth the research?
I've heard good things about some regional banks getting into the LP space for ags, especially for local producers. Might be worth looking into those if you have a strong connection to a specific region's agricultural output.
I've heard some positive things about a few smaller, specialized providers, but their capital requirements can be a hurdle for individual traders. Have you looked into the prop trading firms that focus on ags? They often have direct relationships.
I've explored a few smaller regional banks that also act as LPs for ags, especially for clients with direct farming interests. Fills can be decent, but volume access is definitely limited compared to the big players, which can amplify slippage on larger orders.
Honestly, for ags, especially during major reports, sticking with the known Tier 1s is usually best. Any perceived saving on commission with a smaller provider gets eaten by slippage quickly when volume spikes. I've tried a few others, and the fills are noticeably worse.