Exchange seats - worth buying?
- Thread starter Ghost of Cutten
- Start date
Just throwing it out there:
Full seat is for Ags
AM seat for Treasuries
So, unless you are doing Ags don't buy the full seat. In addition, once you own the seat the CME becomes very interested in you being pretty much a single mostly manual trader. Most automation is going to result in questions unless you do the corp route which has other problems.
Full seat is for Ags
AM seat for Treasuries
So, unless you are doing Ags don't buy the full seat. In addition, once you own the seat the CME becomes very interested in you being pretty much a single mostly manual trader. Most automation is going to result in questions unless you do the corp route which has other problems.
I am only speak from my own experience but the CME has never brought this up with me. At the very worst they may inquire about it but if you are doing nothing wrong there should be nothing to worry about.
There seem to be certain triggers that will get them looking into you. The rules state than ATS's are not 'automatically allowed' under an individual membership but 'automated spreading' is. And I think the line is left purposefully grey.
I used to trade A LOT of ags by myself, manually with an 'autospreader'. They forced me into a corp membership.
Could you post the rule that states that. I am not questioning what you are saying but am interested in looking into this further.
Sure. It's not a single rule, but an amalgam of rules. It's all based on Tag50 regulation. The gist is that CME has taken the stance that a 'single individual does not have the capacity to both design and operate an ATS'. (That's stated explicity somewhere I can't find quickly.) So, if you mark your Tag50 as Automated as an individual member there is some burden of proof involved on your part.
Generally, if you are using 3rd party software with minor ATS ability where you don't even have the capacity to set the Tag50 you might technically still be in a grey area but unless you are doing 20K+ contracts a day I doubt you'd hear from them.
If you start with this link you can probably find the other stuff.
http://www.cmegroup.com/globex/files/tag50rule576.pdf
4.2.2. Member Developed/Operated ATS
Individual members may develop their own ATS hardware and software. Wherein CME Group
determines in its sole discretion that the ATS is solely developed by individual members and is
solely operated and supported by individual members, the trading activity executed through the
ATS for an individual member account may be eligible for member fees.
The burden of proof will be on the individual member utilizing an ATS to provide clear evidence
to CME Groupâs satisfaction that the member developed ATS is solely operated and supported
by the individual member in order to receive member rates based on individual membership
status. As such, the individual member must:
⢠Make all trading decisions and be solely responsible for determining all trading strategies,
parameters, inputs, and alerts; and
⢠Be solely responsible for operating and administrating the system and for monitoring trading
performance, system performance and alerts.
4.2.3 Third Party ATS
Individual members may wish to utilize third party developed ATS hardware and software in
their trading activities. In limited circumstances wherein such third party ATS is solely operated
and supported by the individual member once acquired,14 such trading activity may be eligible
for member fees.
For an ATS to be considered a âthird party ATSâ:
⢠The individual member cannot have any affiliation including ownership interest with the third
party provider; and
⢠The third party developer may not receive any compensation (including any set percentage
or discretionary bonus) based on the performance of the ATS.15
The burden of proof will be on the individual member utilizing an ATS to provide clear evidence
to CME Groupâs satisfaction that the third party ATS is solely operated and supported by the
individual member in order to receive member rates based on individual membership status. As
such, the individual member must:
⢠Make all trading decisions and be solely responsible for determining all trading strategies,
parameters, inputs, and alerts; and
14 For clarity, third party developers may provide data center administration, hardware, and software
updates.
15 To clarify, third party developers may be compensated per a set amount on a monthly, quarterly, yearly
or other time period basis and/or on a set amount per trade.
I fall under the latter.
Individual members may develop their own ATS hardware and software. Wherein CME Group
determines in its sole discretion that the ATS is solely developed by individual members and is
solely operated and supported by individual members, the trading activity executed through the
ATS for an individual member account may be eligible for member fees.
The burden of proof will be on the individual member utilizing an ATS to provide clear evidence
to CME Groupâs satisfaction that the member developed ATS is solely operated and supported
by the individual member in order to receive member rates based on individual membership
status. As such, the individual member must:
⢠Make all trading decisions and be solely responsible for determining all trading strategies,
parameters, inputs, and alerts; and
⢠Be solely responsible for operating and administrating the system and for monitoring trading
performance, system performance and alerts.
4.2.3 Third Party ATS
Individual members may wish to utilize third party developed ATS hardware and software in
their trading activities. In limited circumstances wherein such third party ATS is solely operated
and supported by the individual member once acquired,14 such trading activity may be eligible
for member fees.
For an ATS to be considered a âthird party ATSâ:
⢠The individual member cannot have any affiliation including ownership interest with the third
party provider; and
⢠The third party developer may not receive any compensation (including any set percentage
or discretionary bonus) based on the performance of the ATS.15
The burden of proof will be on the individual member utilizing an ATS to provide clear evidence
to CME Groupâs satisfaction that the third party ATS is solely operated and supported by the
individual member in order to receive member rates based on individual membership status. As
such, the individual member must:
⢠Make all trading decisions and be solely responsible for determining all trading strategies,
parameters, inputs, and alerts; and
14 For clarity, third party developers may provide data center administration, hardware, and software
updates.
15 To clarify, third party developers may be compensated per a set amount on a monthly, quarterly, yearly
or other time period basis and/or on a set amount per trade.
I fall under the latter.
Yeah, I did too. Notice the qualifying language that you 'may be eligible' for member fees. They leave the door open. It's not very nice of them. But I don't think they are looking to be aggressive with that. Just leads to inquiries. What I found crazy though is that the logical progression of taking the next step and writing to them directly (which is actually pretty easy) they somehow consider a superhuman feat of joint effort and everything gets scrutinized.