Can trading micro Eminis be a competition to the TST/OneUpTrader business model?

[Pekelo]

Now that Americans can trade micro Eminis, (for those who don't know, very low margin, small spread, small account) instead of signing up with TST/OneUpTrader, they can just open a small account and trade real money instead of being on a sim.

TST's cheapest monthly fee is $165, for that amount one can trade up to 3 CME micro Emini futures, where the daily margin is only 50 bucks. Small enough not to effect the trader's psyche much, but still having some real money in the game and have a real profit or loss. If the trader wants to, he can still follow TST's rules, but can go way longer if he is profitable, than with them where he has to pay another monthly fee. He can also scale up.

So will this new opportunity negatively effect TST's and OneUpTrader's bottom line? Is this a direct competition for them?

 

[volente_00]

You bet your a$$ it will

I suspect you will see a lowering of fees on their end to combat declining participants. In the beginning the combine was free to set the bait, then was like $50 and now $165.


Gig is up Mike

 

[NQurious]

People actually pay to for a demo account? Why not put the money with any of the smaller brokers like ET Sponsor AMP and ust pay the $5/month for emini data and sim trade til their hearts desire. I get the funding aspect, but I'd paper trade on my own and then wait until I had a trading plan that could pass the trial to get the funding.

Then again, with the micros available (albeit with relatively high transaction costs vis a viz tick value) someone with a profitable trading plan could run that $100 or $200 up right smartly and soon enough be trading the 2 or 3 ES it would take to make a living and grow the account to 10+ lot ability. Of course, the trading plan development is the part that doesn't necessarily happen "soon enough."

 

[Times]

Some brokers offer even lower margin, just $30 per micro for day trading margin.

Anyways, hopefully it makes prop firms more competitive with what they offer. I think prop firm who require "scaling" will be affected most as being required to start small could make traders think they might as well start small with a micro account and keep 100% profit without paying $420/month for pro exchange fees.