Leasing a seat cme worth it?

CALLumbus said:
2500 $ is per month, so it will be about 15k for 6 months.

Depending in what you trade the IOM lease might make more sense, especially if your focus is index futures. Pricing is more around 300 $ per month.

Like tiddlywins said, dont forget the 2k application fee. But if you make enough volume (2k RTs might be a bit to little, but a good start, but best do your own math and calculate everything).

Most FCMs and their introducing brokers will support you with getting a CME memberhsip.
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What does this $2K application fee cover? Sounds to me like a ripoff barrier to entry.
 
CALLumbus said:
Ok, lets do the exact math:
All that matters here are the exchange fees, nobody cares about your commissions and other broker fees.

Lets take the emini index futures (ES, NQ). Without any membership, you will pay 1.28 $ per contract for the exchange fee. With the IOM membership, you will just pay 0.49 $ per contract. So you pay 1.28-0.49 = 0.79 less per contract.

With your 2k RTs (=4k contracts) this would mean that you save 4,000*0.79 = 3,160 USD per month.

IOM lease will be around 2k for 6 months, and you have the application fee 2k. So you have fix cost of about 4k if you decide to give it a try for 6 months. 4k/6months= 666 USD/ month. 666/0.79 = 843 contracts. You have to trade at least 843 contracts per month for this to make sense. Thats your breakeven point.

So as you can see, your 4k contracts per month can make sense with the IOM membership, but not so much with the full CME membership. Thats why I said 2k RT might be to little. If you would trade 10k contracts per month for example, then both the full membership and the IOM would save you lots of money.
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oh ok, that makes sense. When doing a search on memberships, I saw an old post of yours which mentioned having $2k AMP membership in addition to leasing seat , where you can pay .75 RT. Do you know if this is still an option? I'll try reaching out to them.
 
Portfolio Margin (PM) is risk based margin for US-Listed Securities. The alternative is Reg-T Margin which is more cash based. In futures, the CME uses SPAN Margin which is also risk based but much better than PM as the CME is always changing the requirement to current market conditions, while the OCC which governs PM with CPM rules, does not change with market conditions. The OCC expects the Clearing Members to adapt they rules to market conditions.

earth_imperator said:
The following practical info could be interesting & useful:

"How can an individual trader get risk-based margins like a market maker without owning (or leasing) a seat or trading on the exchange floor? Portfolio margin. ... "
https://tickertape.tdameritrade.com/trading/portfolio-margin-vs-reg-t-15526
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pajamabear22 said:
oh ok, that makes sense. When doing a search on memberships, I saw an old post of yours which mentioned having $2k AMP membership in addition to leasing seat , where you can pay .75 RT. Do you know if this is still an option? I'll try reaching out to them.
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They stopped this very soon again, there was not much demand for this from their clients. But if you really make serious monthly volume and you can prove this maybe with some statements, then I am pretty sure that AMP will be happy to customize a very nice deal for you.

But not only AMP. There are many brokers and FCMs that will offer you very low rates if you do some good volume. Advantage Futures is another broker that can go very low with commissions, but at the same time are ultra professional and should be able to offer you whatever you need for a trading, including support with the membership. With the volume you do, Advantage should be able to offer you something like 0.30 per contract. If you would make over 10k contracts per month they would offer you less than 0.10 for sure.

And then you have of course Tradovate. If you pay their monthly membership (199 per month) you will then just pay 0.09 clearing fee per emini contract (in addition to exchange fees). So if you choose Tradovate in combination with an IOM membership you will then have total cost per trade: 0.49 +0.09 = 0.58 per contract. Welcome to scalper's paradise :D
 
pajamabear22 said:
oh ok, Just ES. Thanks, IOM would be much better option. If 2k RT cost $7.6k ($3.80 RT) per month, why would 2k RT be too little?

If I'm leasing a seat, what would it cost RT, to execute through most brokers?
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on the ES you will be looking at around $2.4 round turn and lower pending the exact volume.
 
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