Full Clearing FCM

Quote from coastman14:

We have a good breakdown for CME seat leasing, we just don't have one for cBot... our sliding scale as you have seen is below...



Contracts per Month Per Round Trip(USD) Per Side(USD)
0-4999 $2.15
5000-9999 $2.00
10,000-14,999 $1.80
15,000-19,999 $1.60
20,000-50,000 $1.45
50,000+ $1.30 *


Andrew
VelocityFutures.com
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Andrew,

I believe you are missing my point. If I lease a CBOT IDEM seat, those savings would be mine regardless of who my brokers is. Please tell me what your comission per side would be _without_ the clearing fee and the NFA fee on the MiniDow.

You will see that you are .08 per side more expensive than companies that clear their trades thru companies like yours! :eek:

My guess that this is done on purpose so that you do not compete with your IBs, which you could easily beat on comission rates if you chose to.

nitro
 
@nitro

The reason why IB's often are cheaper than FCM's is that they bring in significant volume.
FCM's as well as IB's do want to make money so they charge markup on their hardcost. As IB's sometimes bring in huge volume like FFasttrade they are charged only very little over hard cost and therefore can pass on this reduction in cost to the trader.
 
Quote from Kingvest:

@nitro

The reason why IB's often are cheaper than FCM's is that they bring in significant volume.
FCM's as well as IB's do want to make money so they charge markup on their hardcost. As IB's sometimes bring in huge volume like FFasttrade they are charged only very little over hard cost and therefore can pass on this reduction in cost to the trader.
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Kingvest - Aaaaaaaaah! Thx that makes sense.

Hmmm, somehow I believe if go knocking "door-to-door" to FCMs at the CBOT that I could get a better rate than that advertised by IBs or the advertised commissions on FCMs website.

They just can't come out and say it.

nitro
 
There is the chance that you get better rates with a FCM than an IB, however you'd have to do some huge volume to get in there.
In most cases it'd be bad business for the FCM to underbid IB's bringing in 100k contracts/month versus a single trader bringing in 1000.
 
Quote from Kingvest:

There is the chance that you get better rates with a FCM than an IB, however you'd have to do some huge volume to get in there.
In most cases it'd be bad business for the FCM to underbid IB's bringing in 100k contracts/month versus a single trader bringing in 1000.
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Okay, I see. What about the FCMs that do not have IB business?

nitro
 
I know none that don't take IB's.

The business is usally that the FCM's take on the big institutional accounts, whereas they leave the volume business to the IB's. I guess Velocity makes an exception but it's definitely the case for companies like merrill, recfo, ghco, rcg, etc.
 
Quote from Kingvest:

I know none that don't take IB's.

The business is usally that the FCM's take on the big institutional accounts, whereas they leave the volume business to the IB's. I guess Velocity makes an exception but it's definitely the case for companies like merrill, recfo, ghco, rcg, etc.
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Ok thanks again for the input. So you don't think any of these firms would offer me a better rate than an IB:

http://www.cbot.com/cbot/pub/page1/1,3248,1055+2+23,00.html

nitro
 
Quote from Bsulli:

Here is a detailed chat that FFastrade gave last year on the breakdown of membership for remote traders on the CME or CBOT.

http://www.elitetrader.com/ch/transcripts/cme_membership.cfm

Good read for what your asking.

Good luck and good trading.

Bsulli
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Bsulli,

Thanks for that link - I am aware of it. Susan is actually my educator on these issues from the IB side.

However, I talked to InteractiveBrokers (an FCM) and the person on the phone seem to believe that I could do better than IntroducingBroker rates by contacting the FCMs directly (funny though, InteractiveBrokers could not itself beat FFastTrades rates :D)

I do not know if I am being led on a wild goose chase here. Either way, I learn a little bit more each time I dwelve deeper...

nitro
 
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