Cost connecting to exchange via VPN

[tonyzhou]

To get a clearing company to allow you to do it requires at least $500k in capital if you have a relationship.

BD costs amortize to about 10k/ month if it's super simple. But you'd have to take series 24. Hosting will set you back 2-3 k per month. Exchange data fee around 3k.

Startup costs. Server 7-10k. Trying to read the exchange direct market fee. 50k.

Not a good option. There are cheaper brokers than IB. Persue that route instead

Clearing company, if charged per share, how much?

BD cost, 10k/month? How do you get this number?

Hosting: 2-3 k per month. As I said, I just need a VPN. If I can establish a VPN from my home, then $0.

Exchange data fee: 3k. I do not exchange data. I can get data from Interactive Brokers, which is free and good enough for me.

Server 7-10K. I do not need server. Just my laptop is enough.

Exchange direct market fee 50K. What's the difference with the 3K exchange data fee? But as I said, IB
data is good for me.

If I do not do HFT, Co-lo and exchange data is not necessary.

So, I think BD cost is 0 for me. I do not need them at all.

The only fee I can see is the clearing fee and regulatory check fees, but you did not give the number. So for a start $500K account, what is the number?

 

[garachen]

The issue is that your question in nonsensical. You asked how to connect to an exchange via VPN.

You don't.

For example. The CME exchange consists of about 100 servers. You don't VPN into them. Instead, you put your server in the building and VPN into that.

Same thing with BATS. Except I've never discussed their infrastructure with them so I don't know how many servers they use.

Clearing fees under this setup from what I recall started at 0.0001 to 0.00001 per share.

The point is this is not a route you should pursue. Just find a cheaper broker than IB for what you are doing or just pay the commission. It's good to be trying to find ways to reduce expenses but you have to be careful when swapping variable costs for fixed costs.

 

[tonyzhou]

For example. The CME exchange consists of about 100 servers. You don't VPN into them. Instead, you put your server in the building and VPN into that.

Same thing with BATS. Except I've never discussed their infrastructure with them so I don't know how many servers they use.

Technically, it is not necessary to put server in the building to VPN into it. Actually, if it is in the same building, managed, there is no need to VPN since it is secure. VPN is used for extranet, that is, you connect to them from outside of their network.

If you only need to trade without data from exchange, any internet connection can handle. Only when you need the exchange data, you need co-lo, because the bandwidth of the data feed requires Gb/s level. It is cheaper to co-lo than put server outside of the building, since you need to pay dark fiber and cross-connect fees.

Now, if you can connect the the exchange via VPN, then infrastructure cost is zero. You only need to pay clearing fee and no commission any more. That saves if your volume is big.

But for discussion and research, direct connect to exchange should be a feasible solution. I am thinking that if the volume is bigger than 10M shares/month, it is cheaper to connect to the exchange directly.

At 10M, IB charges 0.0015, that is $15000/month commission. I believe the cost will be much lower to connect to the exchange directly.

 

[garachen]

Technically, it is not necessary to put server in the building to VPN into it. Actually, if it is in the same building, managed, there is no need to VPN since it is secure. VPN is used for extranet, that is, you connect to them from outside of their network.

If you only need to trade without data from exchange, any internet connection can handle. Only when you need the exchange data, you need co-lo, because the bandwidth of the data feed requires Gb/s level. It is cheaper to co-lo than put server outside of the building, since you need to pay dark fiber and cross-connect fees.

Now, if you can connect the the exchange via VPN, then infrastructure cost is zero. You only need to pay clearing fee and no commission any more. That saves if your volume is big.

But for discussion and research, direct connect to exchange should be a feasible solution. I am thinking that if the volume is bigger than 10M shares/month, it is cheaper to connect to the exchange directly.

At 10M, IB charges 0.0015, that is $15000/month commission. I believe the cost will be much lower to connect to the exchange directly.

Sounds great. Go for it.