Cost Structure for CME Futures Traders

Is is possible to form an LLC and have several individuals share using the leased seat and thereby share the costs?

Thanks
 
Quote from MACD:

Is is possible to form an LLC and have several individuals share using the leased seat and thereby share the costs?

Thanks
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Big no-no. The individuals MUST be trading the seat owner's account and must have no money at risk. The individuals in this case would be executing for the seat owner and must be proprietary in nature. Otherwise, everyone would be doing this. Penalties for doing this include re-computing the fees for each contract traded to the non-member fee and charging you for it. Ouch!

I hope that helps.
 
Quote from FuturesTrader71:

Big no-no. The individuals MUST be trading the seat owner's account and must have no money at risk. The individuals in this case would be executing for the seat owner and must be proprietary in nature. Otherwise, everyone would be doing this. Penalties for doing this include re-computing the fees for each contract traded to the non-member fee and charging you for it. Ouch!

I hope that helps.
More...


Thanks FuturesTrader71 !!
:eek:
 
I just spoke to a trader who is trading thru IB. This trader is trading +2000 sides a month. He is trading thru IB. So he is paying $4800 a month in trading fees.

At a good clearing firm he could be paying .25 a side commissions(payed to clearing firm). So .25 plus 1.14 clearing fees for non-member(payed to CME) would be 1.39 a side. His cost structure would be reduced by 1.11. He would save $2000 a month. That is $24,000 a year! Imagine what he would save if he leased a seat!

Please everyone trying to trade professionally analyze your cost structure!
http://www.cme.com/clearing/clr/fees/nonmember1866.html



Quote from scalper21:

I have noticed over the years that a majority of the traders on this board pay retail commissions. I have attached a spreadsheet that clearly shows that if you average more than 50 sides(25 round turns) a day and pay IB rates which are $2.4 a side you should lease a seat at the CME, and open an account at a professional clearing firm.

http://www.cme.com/trading/mem/leaseprices.html
http://www.cme.com/clearing/clr/fees/lessememp1870.html
More...
 
Quote from scalper21:

I just spoke to a trader who is trading thru IB. This trader is trading +2000 sides a month. He is trading thru IB. So he is paying $4800 a month in trading fees.

At a good clearing firm he could be paying .25 a side commissions(payed to clearing firm). So .25 plus 1.14 clearing fees for non-member(payed to CME) would be 1.39 a side. His cost structure would be reduced by 1.11. He would save $2000 a month. That is $24,000 a year! Imagine what he would save if he leased a seat!

Please everyone trying to trade professionally analyze your cost structure!
http://www.cme.com/clearing/clr/fees/nonmember1866.html
More...
scalper. great work on this thread. love the spreadsheet. When I do the math it looks like the 1.39 you are quoting would be per "round turn" if you lease a seat. making it an even better deal. On the spread sheet it seems youve got it broken down to closer to 70 cents per side. i could be wrong. id love to sit down with you one day and grab a beer. anyway. have a good day trading! jim
 
Quote from scalper21:

I just spoke to a trader who is trading thru IB. This trader is trading +2000 sides a month. He is trading thru IB. So he is paying $4800 a month in trading fees.

At a good clearing firm he could be paying .25 a side commissions(payed to clearing firm). So .25 plus 1.14 clearing fees for non-member(payed to CME) would be 1.39 a side. His cost structure would be reduced by 1.11. He would save $2000 a month. That is $24,000 a year! Imagine what he would save if he leased a seat!

Please everyone trying to trade professionally analyze your cost structure!
http://www.cme.com/clearing/clr/fees/nonmember1866.html
More...
A couple of things to consider with a professional clearing firm: You need a minimum of $25k, you have to pay NFA of 2 cents per side for non-members, a 25 cent per side commish is the TOP side of what you should pay. There should be a cap and a reduction in commissions as volume progresses. This only applies to commish, not exchange fees charged by the CME/CBOT, etc.

Good luck.
 
Quote from scalper21:

I have noticed over the years that a majority of the traders on this board pay retail commissions. I have attached a spreadsheet that clearly shows that if you average more than 50 sides(25 round turns) a day and pay IB rates which are $2.4 a side you should lease a seat at the CME, and open an account at a professional clearing firm.

http://www.cme.com/trading/mem/leaseprices.html
http://www.cme.com/clearing/clr/fees/lessememp1870.html
More...

Thanks for the post, I've been telling new traders for years that it's hard to compete when you have to pay 10 times as much in commissions.

And, like my brother, many own the seats, so no lease fees...even better (and, darn, I can't use that pricing either).

Don
 
Quote from FuturesTrader71:

A couple of things to consider with a professional clearing firm: You need a minimum of $25k, you have to pay NFA of 2 cents per side for non-members, a 25 cent per side commish is the TOP side of what you should pay. There should be a cap and a reduction in commissions as volume progresses. This only applies to commish, not exchange fees charged by the CME/CBOT, etc.

Good luck.
More...
I know you cant say exactly and there are alot of variables but what could one expect, being a member, to pay round turn or per side. Even if you paid 25 cents per round turn on the commision. thx jim
 
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