Please recommend futures trading prop firms that offer traders to pay member rates on the CME CBOT, NYMEX and COMEX. I will be depositing all the capital (so no backing is required). Not only do I require low exchange fees, I also require low commissions. I think I would prefer remote trading, but I would consider relocating to the prop firms office. I am using TT but, I will consider using other front ends. It would be a bonus if the prop firm has low latency infrastructure. Thanks in advance
It doesn't work like that. Member firms can't share their fee structure with non-members. You would still have to lease your own seat or be a bonafide equity holder of the member firm which I believe the CME looks for $250k. Even then, if you are paid primarily on your own trading you'd probably have to lease a seat still. What you want is what the CME has deemed a trading arcade. They put an end to those years ago. You can join a member firm and get member rates but you have to be a W2 employee of that firm with your payout not strongly tied to your trading. I wouldn't even call it a payout. Better word would be salary. And it would resemble 20% of your contribution to firm profits. Maybe there are some non-US firms that skirt the rules. The danger is that the CME has shown itself perfectly willing to retroactively charge non-member rates in cases where they feel this stuff is going on. They hand a giant bill to the FCM which then hands over all the firms capital and there goes your money.
Hi mmt, Garachen is of course correct, however there may be a grey area if you are based in Europe. Yes, the old London trading arcades are gone. However there is a firm founded by a fairly well known ex-LIFFE local which is a clearing member of CME. I don't want to name the firm here but it would be easy enough to find. Anyway, they'll deal OTC with you in market size and fill you based on where they are filled. They have member rates themselves and will charge a slight mark up to you. This will be cheaper rates than you can get without a membership if you're doing more than 1K futures / month. Legally, they are executing on CME as principal. The objective of their trade at CME is to hedge their OTC exposure to you / other clients. So their back-to-back hedge (so far) hasn't been seen by CME (as far as I am aware) of passing membership benefits to non members. Garachen's right about the credit risk of dealing with an arcade or similar if the CME retroactively adjusts fees on prior deal to a CTI4. However, another idiosyncrasy of the regulatory regime in the UK is that when dealing with this firm, the first £85,000 you deposit with the firm is gov't insured funded by a levy on FCA regulated businesses. Think the account minimums are about £50k and they'll be wanting to see you doing a few thousand futures a month. If you sweep out any P&L above £85k this is probably your best bet until its economic to afford a membership. Been a few years since I looked into this so some stuff might be out of date, DYOR, etc. But this firm can't take clients resident outside of EEA. And if you deal in a corporate name you won't get the insurance on your deposit.
Hi mmt, I had a similar request last year. I settled on a FCM that offered good but not great rates. How did you do?