CME Group - fees outrageous
- Thread starter syswizard
- Start date
In the old days you had to be recommended by another member...is that still part of the rules or are the rules you've just mention are new after too many problems with those that were recommended ?
wrbtrader
You can always get a recommendation from your clearing firm or broker if needs be. That’s the most common avenue and they are usually delighted to help.
Thanks to MattZ, bone, and Wrbtrader for straightening this out. The background check is quite a surprise....FBI ? Wow.
I misquoted the Exchange Fee rates....I had the wrong column.
The best deals are:
Clearing Equity Member Firms: $0.35
Rule 106.D Lessee's $0.47
Rule 106.R Electronic Corporate Member $0.50
These are all around a 60% discount to what I am currently paying.
Now this gets interesting....since I have my own multi-member LLC with tax id, wouldn't be best that I go in that direction ? I'm already classified as "professional" according to Interactive Broker's criteria. The 3 penny difference is nothing. What does it take to become an Electronic Corporate Member ?
I misquoted the Exchange Fee rates....I had the wrong column.
The best deals are:
Clearing Equity Member Firms: $0.35
Rule 106.D Lessee's $0.47
Rule 106.R Electronic Corporate Member $0.50
These are all around a 60% discount to what I am currently paying.
Now this gets interesting....since I have my own multi-member LLC with tax id, wouldn't be best that I go in that direction ? I'm already classified as "professional" according to Interactive Broker's criteria. The 3 penny difference is nothing. What does it take to become an Electronic Corporate Member ?
A hell of a lot more volume than 100 cars per day. Think Jump, Geneva, Peak 6, DRW... prop firms that trade millions of round turns per month. Firms with employees paid on a W-2 according to CME rules for Electronic Members.Ah....so the prop firms are in that category. Is there a minimum # of contracts per month to qualify I wonder ? No question I could not compete with the prop firms in terms of volume. Not even close.
So the CME forces prop firms to hire traders only on a W2 basis vs. a 1099 basis ?
Yep - it’s in the Electronic Member Firm charter agreement. They are also not allowed to risk employee trader capital - only the Firm’s Principals can have capital at risk. I’ve done consulting for a few of them.
Electronic Member Firms have substantial capital requirements, they are required to own or lease two or more seats, and they are required to have employee traders. They cannot handle third party funds.
That is the CME seat lease not the IOM index and options market which is $250 a month. I paid $2000 admin fee to become a member of the CBOT this year. I don’t think I was investigated by the FBI as they turned it around very quickly as they are desperate for bids on seats in this bear market.
No need for a recommendation when you clear IB. Just call membership at the CME to help you fill in the paperwork that is on their website. When your bid is hit on a seat or a lease, tell IB to reduce your fees.
Used to be the case. Matching engine is in Aurora if I remember. If you are point an click scalping, good luck. If you are automated or spreading, you should be collocated at Aurora. Everything automated runs server side.