Which firms don't pay any commission?

M

mutluit

Hi All,
I wonder how much commission, if any, do the member firms of the US exchanges (NASD/NYSE) pay?
Yes, sounds funny, because I was under the impression that house members
pay their membership fee and in return get free access to the exchange, ie. no commission etc.
Is that correct?

The reason I'm asking is: I've developed an options system (written in C++) which works best
without commission, but it needs a big pocket (200k+), so I thought that it makes sense to
get in contact with such firms.
I would appreciate it if somebody could recommend some firms I should contact.

Thx
 
mutluit said:
Hi All,
I wonder how much commission, if any, do the member firms of the US exchanges (NASD/NYSE) pay?
Yes, sounds funny, because I was under the impression that house members
pay their membership fee and in return get free access to the exchange, ie. no commission etc.
Is that correct?

The reason I'm asking is: I've developed an options system (written in C++) which works best
without commission, but it needs a big pocket (200k+), so I thought that it makes sense to
get in contact with such firms.
I would appreciate it if somebody could recommend some firms I should contact.

Thx
More...


I'm not sure where to start. To avoid clearing/execution commissions you would need to own a self-clearing broker dealer and have a large fixed overhead. Then you would still have to pay member rates at the exchange. Not free!

If you just start your own broker dealer and lease a trading permit from an option exchange, you will still have exchange fees and clearing cost and the overhead of the BD.

To get an idea of capital required ($200K not in the ball park), a MM on one of the option exchanges needs a guarantor for their trades (their clearing firm).There are three option clearing firms for MM, the minimum AUM is over $5M right now.

$200K gets you a Portfolio Margin account at a few online clearing firms like TD and IB. To get much lower option commissions you will need high volume and an institutional account which requires more capital.

One more fee. Regulatory option fees are around $0.092/option right now.

Bob
 
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