CME Group - fees outrageous

[ZBZB]

Buy a seat so you do not have to pay exchange fees. Seat prices are in a year long bear market. I think the farmers in the mid west who are near bankruptcy due to too much rain are hitting every bid in Cbot seats.

https://www.cmegroup.com/company/membership/membership-and-lease-pricing.html

 

[syswizard]

Which fees are outrageous, to whom do these outrageous fees apply, and what do you think the fees SHOULD be?

$1.30 per contract for exchange fee. Applies to non-exchange membership traders. Should be less than $0.50 IMHO.

 

[jharmon]

Futures trading is an elite profession. Come back when you have the ante.
Hint: We won't miss you.

You're still here? SECURITY?!

 

[bone]

I think the farmers in the mid west who are near bankruptcy due to too much rain are hitting every bid in Cbot seats.

No, from my personal experience leasing seats farmers aren’t your typical seat owners. My mother’s side of the family farms on 3500 acres in the Midwest - huge operation. They pay something like $25 per RT and use a local broker. In the Summer they spend hundreds of thousands of dollars per month just on Diesel. They’ve got something like 45 people on their payroll. The equipment they own is worth a fortune. When my Aunt told me what they pay for seed in the Spring my jaw hit the floor.

So paying $500 per year on brokerage and fees to hedge isn’t an extraordinary cost for the type of farmer who would be prone to hedging with futures and options.

 

[bone]

Many exchanges tried to compete with some of the contacts listed on the CME, and sadly it went nowhere.

As you so ably mentioned there is a very long history of futures exchanges poaching contracts from competitors and getting nowhere with them. It’s s long list of familiar names over the past three decades. While electronic markets make this a relatively easy thing to do - luring established trading volume away from popular and entrenched exchange products is apparently an exceedingly difficult proposition. Traders tend to stay where liquidity resides. Saving $1 per RT on transaction costs is trivial compared to the slippage associated with liquidity gaps (at the worst times) and a wider bid/ask spread.

And what market maker in his right mind is willing to get flipped and run over - he HAS to make a wider market than his hedge. If he fills 5,000 per day he needs $100,000 per week subsidy (easily) just to cover his hedge slippage. And he’s going to need to buy a very expensive ECN and Orc software ($$$). Designated MM’s in new futures products have a history of getting smoked. Ask Ray Cahnman.

If you are scalping futures you should be leasing a seat - that’s what they’re there for. If you are position trading then paying $5 per RT isn’t really an issue when you’re taking 3,5,10,20 tics out of the market. Brokers and trading exchanges love retail scalpers - for good reason.

 

[MarkBrown]

what pisses me off highly is that the exchanges throttle the data that is supposedly real time to retail. so you pay for real time but you don't get the same data that members get. remember the exchanges exist for the benefit of it's members and not to serve the public. keeping that in mind one can out maneuver the members, if you understand the antics they play.

yesterday i was watching a bracket trade and it was like someone flipped the lights off and back on and suddenly my trade was gone, lol. it was a wide ride yesterday on the emini sp and i know that there is manipulation going on there is no doubts. but you just have to work around it.

there was much discussion a few years back about eliminating the illegal real time fees in the first place they are public domain we all own that data. the thought was the elimination of fees would bring in more volume but as typical greed took over good sense and that is why people are working on a global exchange match up engine that would completely eliminate exchanges and brokers. every trader would become their own exchange, it's in the works.

 

[bone]

what pisses me off highly is that the exchanges throttle the data that is supposedly real time to retail. so you pay for real time but you don't get the same data that members get. remember the exchanges exist for the benefit of it's members and not to serve the public. keeping that in mind one can out maneuver the members, if you understand the antics they play.

yesterday i was watching a bracket trade and it was like someone flipped the lights off and back on and suddenly my trade was gone, lol. it was a wide ride yesterday on the emini sp and i know that there is manipulation going on there is no doubts. but you just have to work around it.

there was much discussion a few years back about eliminating the illegal real time fees in the first place they are public domain we all own that data. the thought was the elimination of fees would bring in more volume but as typical greed took over good sense and that is why people are working on a global exchange match up engine that would completely eliminate exchanges and brokers. every trader would become their own exchange, it's in the works.

I would not disagree with you when it comes to charting platforms - although Bloomberg is VERY good.

I’ve personally never seen throttled quotes on quality execution platforms like TT or CTS using a direct FCM.

 

[ZBZB]

No, from my personal experience leasing seats farmers aren’t your typical seat owners. My mother’s side of the family farms on 3500 acres in the Midwest - huge operation. They pay something like $25 per RT and use a local broker. In the Summer they spend hundreds of thousands of dollars per month just on Diesel. They’ve got something like 45 people on their payroll. The equipment they own is worth a fortune. When my Aunt told me what they pay for seed in the Spring my jaw hit the floor.

So paying $500 per year on brokerage and fees to hedge isn’t an extraordinary cost for the type of farmer who would be prone to hedging with futures and options.

Who is liquidating seats then?

 

[bone]

Who is liquidating seats then?

Exchange Services keeps a running list of the names and addresses of seat holders putting up seats for lease or sale. As I recall in the past most were Chicago and NYC. Some Florida and Greenwich CT. Many of the rural listings were Co-Ops but number was smallish.

 

[MarkBrown]

I would not disagree with you when it comes to charting platforms - although Bloomberg is VERY good.

I’ve personally never seen throttled quotes on quality execution platforms like TT or CTS using a direct FCM.

I worked from an office on the 8th floor of the old CME building and we run fiber up the elevator shaft from the members server to my trading computers. I also had all the retail feeds through the regular sources, all the popular ones we had everything. The exchange limits the data transmission rates for the feed they supply to data vendors. Listen what I said they limit the data transmission rate to the public, there is a buffer I know the person who designed the system. You can not win against the members in a FAST MARKET.