Onboarding Friction for Commodity Futures – Specifically Margin Flexibility
Anyone else finding the onboarding process for commodity futures accounts increasingly rigid, particularly around how margin is assessed for non-standard positions? I'm not talking about basic outrights, but more complex spreads or structured positions that some of the newer prop firm or even prime brokerage setups are supposedly catering to. It seems the backend systems are still catching up to the marketing copy when it comes to assessing actual risk versus just applying blunt portfolio margin rules. Leads to a lot of capital being tied up unnecessarily, or outright rejection of strategies that are perfectly sound risk-wise.
It's creating a significant bottleneck for deploying capital efficiently, especially with some of the more niche ags or soft commodities where liquidity can be a factor. Are we stuck with the legacy brokers who at least have the discretionary review, or are there platforms that genuinely offer a more nuanced approach to risk and margin during their KYB/onboarding phase for these types of strategies?
Agreed. It feels like a lot of firms talk a big game about sophisticated risk management but when you get into the weeds, their systems are just applying standard SPAN on everything without much flexibility for custom portfolio margining.