Full Clearing FCM
- Thread starter nitro
- Start date
It is true that if you are a member, it matters not where you clear your trades, your exchange fees will be lower, and most if not all firms pass that directly to you. The FCM or IB makes the same if you are non-member or member, but if you own or lease a seat you will probably trade a lot more than a non-member. You can use this logic to gain greater leverage when negotiating a long term relationship with your FCM or IB.
Any FCM or IB can help you establish a membership lease or purchase with the CME or CBOT. It takes a little time, but is well worth it if you do the volume. There are some spreadsheets on our website that show the CME in detail with membership, lease and non member. As for the CBOT, we are working on same. You just have to do a break even analysis of the situation. As for traders, I know this can be hard, trying to speculate exactly how much money you are going to make in the next 6 months to a year and if a seat is worth it. Most traders wait and wait. My suggestion is to look at your last 6 months and if a seat saved you more than 40k. Then...the answer is simple. Purchase one.
As for rates and discounts, all is dependent on volume. IB's are just middlemen, but can provide very good service. FCM's actually hold your funds and have direct connections to the exchanges. This can be helpfull when you are in trouble and the IB has to get off of the phone with you and call thier FCM to get your problem resolved. This is of course different with FFastFill as they have their own software and go direct instead of most IB's who use J-Trader or TT through thier FCM.
As for price, you do get what you pay for, service can be more important than rates when it comes to errors and software support in trading news and what not. But, I suggest finding the lowest price with the most reliable service...
I hope that helps, FCM's costs are lower but their overhead of maintaining servers locally is higher. You just have to factor in how much you trade and what it costs if you have problems in a pinch.
Jay
Any FCM or IB can help you establish a membership lease or purchase with the CME or CBOT. It takes a little time, but is well worth it if you do the volume. There are some spreadsheets on our website that show the CME in detail with membership, lease and non member. As for the CBOT, we are working on same. You just have to do a break even analysis of the situation. As for traders, I know this can be hard, trying to speculate exactly how much money you are going to make in the next 6 months to a year and if a seat is worth it. Most traders wait and wait. My suggestion is to look at your last 6 months and if a seat saved you more than 40k. Then...the answer is simple. Purchase one.
As for rates and discounts, all is dependent on volume. IB's are just middlemen, but can provide very good service. FCM's actually hold your funds and have direct connections to the exchanges. This can be helpfull when you are in trouble and the IB has to get off of the phone with you and call thier FCM to get your problem resolved. This is of course different with FFastFill as they have their own software and go direct instead of most IB's who use J-Trader or TT through thier FCM.
As for price, you do get what you pay for, service can be more important than rates when it comes to errors and software support in trading news and what not. But, I suggest finding the lowest price with the most reliable service...
I hope that helps, FCM's costs are lower but their overhead of maintaining servers locally is higher. You just have to factor in how much you trade and what it costs if you have problems in a pinch.
Jay
Jay,
Thanks for the response. I already know all this. What I am looking for is an FCM that will beat IntroducingBroker rates on the Mini-Dow at every level of volume and that has an API.
I am extremely comission sensitive since I will be doing somewhere between 200-500 RTs a day to start with, and possibly 1000 - 2000 RTs a day (in YM/ES/NQ combined) when all cylinders are firing.
From what I can tell, FFastTrade seems to be the best IB. I still do not know what added service and/or advantage these FCMs that recently started advertising on ET offer over FFastTrade, yours included.
nitro
Thanks for the response. I already know all this. What I am looking for is an FCM that will beat IntroducingBroker rates on the Mini-Dow at every level of volume and that has an API.
I am extremely comission sensitive since I will be doing somewhere between 200-500 RTs a day to start with, and possibly 1000 - 2000 RTs a day (in YM/ES/NQ combined) when all cylinders are firing.
From what I can tell, FFastTrade seems to be the best IB. I still do not know what added service and/or advantage these FCMs that recently started advertising on ET offer over FFastTrade, yours included.
nitro
Well, if you are currently trading with anyone, your rates for the YM (mini-dow) will be .10 clearing + 1.50 exchange fees + your brokers commissions...if you are an IDEM lease (for example) you will pay .10 clearing, plus .40 exchange plus your brokers commissions.
A net savings of $1.10 per round trip just in exchange fees alone, which at 500 RT per day, 20 trading days...that would be $11,000 per month in savings. Membership or rather leasing a membership has it's privileges. As a member, you would pay even .30 less per RT or another $3000 in savings.
At our lowest rate of commissions for an account with extremely high volume you would be at level 6 or $.35 RT. Retail-non-member would be $1.75 by comparison. For the volume mentioned above you rate would be $.91 per RT for a member, vs. $2.20 for a non-member).
http://www.cbot.com/cbot/pub/page/0,3181,1042,00.html
is the Cbot schedule with all of the above rates on it.
As for an API, which API are you currently programming to?, J-Trader by Pats, TT, or Interactive Brokers?
TT API will cost you $1400/month or $900 in addition to your platform. J-Trader is Free. And Interactive Brokers is Free ( I think ). You must factor that into your model when pricing FCM's. We offer the first two above API's currently.
I hope that helps.
Jay
A net savings of $1.10 per round trip just in exchange fees alone, which at 500 RT per day, 20 trading days...that would be $11,000 per month in savings. Membership or rather leasing a membership has it's privileges. As a member, you would pay even .30 less per RT or another $3000 in savings.
At our lowest rate of commissions for an account with extremely high volume you would be at level 6 or $.35 RT. Retail-non-member would be $1.75 by comparison. For the volume mentioned above you rate would be $.91 per RT for a member, vs. $2.20 for a non-member).
http://www.cbot.com/cbot/pub/page/0,3181,1042,00.html
is the Cbot schedule with all of the above rates on it.
As for an API, which API are you currently programming to?, J-Trader by Pats, TT, or Interactive Brokers?
TT API will cost you $1400/month or $900 in addition to your platform. J-Trader is Free. And Interactive Brokers is Free ( I think ). You must factor that into your model when pricing FCM's. We offer the first two above API's currently.
I hope that helps.
Jay
Jay
From what the CBOT told me, the clearing fee if I leased a seat would be .10 for the first 25K and .05 thereafter. They also tack on a .05 for "Contracts Cleared (including give-up executions, give-up claims, transfers, EFP's and misclears)." So .15 is the least you pay to the CBOT to trade the YM even if you own an entire CBOT seat.
Now, if you are only leasing a seat, there is an extra .15 for "Delegates or e-cbot® only Member Firms." So leasing an IDEM seat you are at .10 + .05 + .15 = .30 per side to start with just to pay the CBOT. If you actually own the seat, you can knock off the extra .15 for "Delegates or e-cbot® only Member Firms."
The variable that changes from broker to broker is the broker's commission, plus what they charge for the API. Like I stated in the previous post, at least when comparing what is advertised on all of the FCMs website to FFastTrade, you start out higher than they do _on_the_broker_part_of_the_comission_.
So one is lead to believe that at every volume level when comparing the FCMs that advertise with EliteTrader with someone like FFastTrade, they would seem to beat any of the FCMs by the same sliding scale of volume (see below though)
Ultimately, I am just interested in the lowest all-inclusive cost to execute a trade at the volume rates I stated above.
The one thing to mention is that the rates that FFastTrade advertises does not include an API cost since they do not currently have one. So perhaps your rates are a little higher because your rates already include an API cost rolled into them. However, I see no mention of that anywhere.
It did a little bit, but frankly I am more confused now than when I started. Here is why:
1) Your CBOT numbers do not match what I was told by the CBOT for member/lease rates on the YM thru an IDEM seat.
2) I cannot get a sliding scale from anyone with everything clearly stated for the comission + exchange fee + API fee
3) Your comments about the Pats API has got me confused, since I thought they also tacked on a per transaction fee to execute thru their API.
Thanks for your time.
nitro
I talked to the CBOT about this. Forget about not leasing an IDEM seat for now, as I would do this so no need to not talk about non-seat rates.
From what the CBOT told me, the clearing fee if I leased a seat would be .10 for the first 25K and .05 thereafter. They also tack on a .05 for "Contracts Cleared (including give-up executions, give-up claims, transfers, EFP's and misclears)." So .15 is the least you pay to the CBOT to trade the YM even if you own an entire CBOT seat.
Now, if you are only leasing a seat, there is an extra .15 for "Delegates or e-cbot® only Member Firms." So leasing an IDEM seat you are at .10 + .05 + .15 = .30 per side to start with just to pay the CBOT. If you actually own the seat, you can knock off the extra .15 for "Delegates or e-cbot® only Member Firms."
Again, I am already aware of the benefits of leasing or owning a seat. Those costs would be passed on to me regardless of what broker I choose. As far as I know, these costs are constant no matter which broker I choose.
The variable that changes from broker to broker is the broker's commission, plus what they charge for the API. Like I stated in the previous post, at least when comparing what is advertised on all of the FCMs website to FFastTrade, you start out higher than they do _on_the_broker_part_of_the_comission_.
So one is lead to believe that at every volume level when comparing the FCMs that advertise with EliteTrader with someone like FFastTrade, they would seem to beat any of the FCMs by the same sliding scale of volume (see below though)
You state extremely high volume, but that means nothing to me. I am not interested in what I save in comissions in relation to the rest of your comissions structure, I am only interested in what I save in relation to other brokers at the same volume rate. In other words, I am interested in the lowest comission possible from _any_ broker at _every_ sliding scale of volume.
Ultimately, I am just interested in the lowest all-inclusive cost to execute a trade at the volume rates I stated above.
Thanks, I am aware of it, but again, these rates are not what I am interested in, as no matter what broker I go with, they are passing these costs on to me.
Currently InteractiveBrokers.
J-Trader has two API's, the FIX API and the proprietary API. From what I understand, Pats also wants to tack on a per transaction fee on top of all executions made thru their API. I do not know if the cost of the FIX is the same as the cost of the Proprietary. They also have a sliding scale for volume.
The one thing to mention is that the rates that FFastTrade advertises does not include an API cost since they do not currently have one. So perhaps your rates are a little higher because your rates already include an API cost rolled into them. However, I see no mention of that anywhere.
Yes, good point. However, are you saying that you offer the Pats API for "free" (which one ? Perhaps you are rolling the Pats API per transaction fee into your comission?) at every level of volume?
It did a little bit, but frankly I am more confused now than when I started. Here is why:
1) Your CBOT numbers do not match what I was told by the CBOT for member/lease rates on the YM thru an IDEM seat.
2) I cannot get a sliding scale from anyone with everything clearly stated for the comission + exchange fee + API fee
3) Your comments about the Pats API has got me confused, since I thought they also tacked on a per transaction fee to execute thru their API.
Thanks for your time.
nitro
ok, ok. i do trade high volume (not exclusively 1 tick, but a good percentage) i also trade 2 points. i use good t/a. going on four years profitable.
if you don't mind me asking, what do you generally like to make on ym?
thanks
ps: i am sure you have answered this before, but it will be new to me !
if you don't mind me asking, what do you generally like to make on ym?
thanks
ps: i am sure you have answered this before, but it will be new to me !