Cme Seat Lease

Quote from BoomBoom68:

Any opinions on this? It looks like you save 1.50 RT and you have to pay $1500 per mth for the seat lease. However, you also have to pay Self Employment tax too at approx 15%. I do about 100 round turns per day. So I will save approx $3k per mth ( 1.50 x 100 x 20 days) - but i will spend $1500 per mth for the seat lease - and now i have to pay 15% self employment tax - dosn;t seem worth it - am I missing something? Any advice appreciated.
More...

You have to be doing much more than 100 RT daily to make leasing a seat a good deal, as you would not benefit from the Globex daily fee cap. The Globex daily fee cap on E-mini products is $50 (200 sides times $0.25). Your daily 100 RT is exactly at the Globex fee cap level.

Because of FICA, seat leases only make sense if your average profit per trade is small. If your average profit per trade is large you are better off being a nonmember because the FICA tax ends up being higher than the savings from the lower rate of member exchange fees.

A full CME seat currently leases for $3800 a month and an IOM seat currently leases for $1950 a month.
 
You must log in or register to reply here.
Back
Top