Is is possible to form an LLC and have several individuals share using the leased seat and thereby share the costs? Thanks
Big no-no. The individuals MUST be trading the seat owner's account and must have no money at risk. The individuals in this case would be executing for the seat owner and must be proprietary in nature. Otherwise, everyone would be doing this. Penalties for doing this include re-computing the fees for each contract traded to the non-member fee and charging you for it. Ouch! I hope that helps.
I just spoke to a trader who is trading thru IB. This trader is trading +2000 sides a month. He is trading thru IB. So he is paying $4800 a month in trading fees. At a good clearing firm he could be paying .25 a side commissions(payed to clearing firm). So .25 plus 1.14 clearing fees for non-member(payed to CME) would be 1.39 a side. His cost structure would be reduced by 1.11. He would save $2000 a month. That is $24,000 a year! Imagine what he would save if he leased a seat! Please everyone trying to trade professionally analyze your cost structure! http://www.cme.com/clearing/clr/fees/nonmember1866.html
scalper. great work on this thread. love the spreadsheet. When I do the math it looks like the 1.39 you are quoting would be per "round turn" if you lease a seat. making it an even better deal. On the spread sheet it seems youve got it broken down to closer to 70 cents per side. i could be wrong. id love to sit down with you one day and grab a beer. anyway. have a good day trading! jim
A couple of things to consider with a professional clearing firm: You need a minimum of $25k, you have to pay NFA of 2 cents per side for non-members, a 25 cent per side commish is the TOP side of what you should pay. There should be a cap and a reduction in commissions as volume progresses. This only applies to commish, not exchange fees charged by the CME/CBOT, etc. Good luck.
Thanks for the post, I've been telling new traders for years that it's hard to compete when you have to pay 10 times as much in commissions. And, like my brother, many own the seats, so no lease fees...even better (and, darn, I can't use that pricing either). Don
I know you cant say exactly and there are alot of variables but what could one expect, being a member, to pay round turn or per side. Even if you paid 25 cents per round turn on the commision. thx jim