Thank you very much for the historical information. I didn't realize things could go that way. Do you own a clearing member firm?
Not a clearing member. But a corporate member. Which is actually harder now since clearing members are not required to buy the 40,000 shares of CME stock anymore. Corporate membership on everything is 12 seats and 40,000 shares.
Wow you're forced to purchase 40k shares? What an amazing requirement that I cannot see how anyone would think is reasonable. Is there any significant advantage of a corporate member vs a clearing member?
I will take a stab at this. Garachen must be in bed for the early futures open. Corporate members have trading privileges tied to their account/system id. Ie hedge funds, proprietary trading groups. Clearing members take full clearing responsibility with both their accounts and non-member customer accounts with CME clearing departments. ie well-heeled floor brokers Where I am very uncertain is FCMs. I think their distinction is the additional ability to handle deliveries and extend credit.
Basically as xandman said. Corporate membership is similar to individual membership but it applies to your bonafide employees. Clearing members interface with the exchange directly, have some additional regulatory issues and have the ability to pass on / guarantee their customers trades. So, when CHF goes nuts the CME looks to the clearing members ( like IB) to make good on the trades. Then it's IBs resposability to go after its customers individually. They only get member rates themselves if they become corporate members and are trading their own account. This whole business plays out like a Michael Lewis book. It's hard to believe it if you haven't lived through it.
Here's what I dug up on total seats issued. 625 Full CME (corp needs 2) 813 IMM (corp needs 2) 1402 Full CBOT (corp needs 1) 816 NYMEX (corp needs 2) 772 COMEX (corp needs 2) Given that there are about 70 CME clearing members that only leaves 485 full cme seats available. So there are fewer than 250 possible corp memberships. There's really no reason for an individual to buy a full membership so the limiting factor might actually be the IMM seats if there's significant individual ownership.
I don't understand this. Why is there no reason for an individual to buy a CME membership? What about CBOT?
All the products people actually trade (CME) are covered by the imm and IOM seats. The CME full I think only adds milk and lumber - basically nothing worth the price except that it's required for corporate and clearing members. All the other seats are suitable for individuals.
CME full also has hogs and cattle. There was a time you would want the floor broker to be Godfather/Sandek to your child. People there mostly worked 9AM-1PM. (Not counting outtrades/settlment issues.) Sweet hours, huh?