Dropped in favor for options. There is apparently more money in options right now. ER2, DAX and EuroSTOXX 50 are still scheduled to be available next year on EurexUS.
Futurestrader71, That is good to hear. I heard EurexUS is going to roll out a Russell 1000 to compete with the spoo? That makes sense to me. Wish they would roll it out sooner tho. The CME is milking my ass on fees. I could give a hoot if it is liquid etc on the Eurex USA. The threat alone will knock some sense into the CME. I hate to bitch. Badge or no badge the CME has GAUGED my eyes out with fees over the years. RIDICULOUS! I think they actually RELISH gauging traders. Another thing, the CME needs to take off the protocol and kill the big spoo in the pit. I think that may bring back a little vol with institutions putting up 10,000.
I am a member of the CME just so I can get those lower rates and avoid the NFA fee of $0.06 per RT. I hear you on the fees; competition is always healthy. I am also a member of the CBOT and feel that, although EurexUS has put some pressure on the notes/bonds, it is beneficial overall to the members. I don't believe the exchanges' fees are an attempt to gauge traders. I think it is just a marketing tool to enhance the value of membership. With membership, you get commitment of the traders to that exchange. It also theoretically helps keep an orderly market by making those who participate in volume really take that market seriously. Now, this is just an attempt at explaining my perception of the logic behind those fee structures. I am neither for nor against it. I do believe in healthy competition though and EurexUS might provide that depending on their selection of products and the kind of traders that trade them. If you do enough volume on the CME that you feel that you are being ripped by the exchange, you might want to seriously consider starting an LLC (costs only around $350 or so to set one up) and trading under an ECM (free membership until October 2005). The fee will be $0.88 + commission (which shouldn't be more than $0.60 per roundturn). You will avoid the NFA fee and will reduce your cost dramatically. It depends on your situation. It amazes me how big a gap in fees there is between members and non-members. As competition grows and more people trade electronic futures, this gap will get narrower just as it is with the CBOT. Once those gaps are too narrow, I will find something else to trade. It is a sign that there isn't much edge left in that market. Good luck and happy trading.
I need to check out the LLC. A lease is fine for me. However, I should have bought a seat back in the day. I cleared globex for 40 cents back in the day when I was prop (self clearing). No one could believe how low we got it. With that said. I was just bitching on saturday evening. I busted a water pipe in the Basement earlier and am generally pissed right now! Come monday I will still be trading at the Merc. No harm no foul! CME is expensive compared with all the exchanges I trade. Way more expensive compared to Eurex. I think they could actually make more money at the Merc--by cutting fees. Guys just starting out are paying 5 bucks a round turn and going to Eurex the first day ---go figure. Cbot is down around 2 bucks a change for the newbies. I just think the Merc is keeping fees artificially high. That is all I was saying is that the Merc costs me more money than any other exchange for electronic execution. However, a little bird tells me if/when Eurex USA comes out with the ER2 and Has 5cents commissions. Things may get interesting!!!!
I think you have to look at this from another perspective as well. Globex is now a pretty cutting edge trading platform. I was reading an article the other day about how they think that 100millisecond executions are too slow. They are optimizing the system in an attempt to get the executions on Globex down to 10 milliseconds, which is around the speed it takes INET to match equities. Those fees are going towards making Globex a faster, efficient order matching system, as well as supporting some of the exchange functions. Can't say I'm too happy with the CBOT's order matching engine (Liffe Connect). The BOT needs to look at the CME, and adopt the same principles. Just a thought...
FYI I received this from EurexUS just now: ------------------------------------------- Please find attached Eurex US Circular No. 55/2004. The circular announces that the exchange will launch futures on the U.S. large-cap Russell 1000® index and the U.S. small cap Russell 2000® index at the end of January 2005. ------------------------------ I have been calling EurexUS about this since June. Cheers! Here is the full notice to exchange members: Eurex US to Launch Futures on Russell Indexes at the End of January 2005 Russell 1000® and Russell 2000 ® products are first U.S. equity index derivatives on Eurex US/ Nandapurkar: New asset class on Eurex US offers new trading and arbitrage opportunities Eurex US, the fully-electronic U.S. futures and options exchange, announced today that the exchange will launch futures on the U.S. large-cap Russell 1000® index and the U.S. small cap Russell 2000® index at the end of January 2005. This marks the expansion of Eurex USâ product portfolio and Eurexâs global liquidity network into U.S. index derivatives for the first time. Eurex US currently offers futures and options on futures on U.S. Treasury products. âListing Russell index products is a major step towards serving our customers worldwide with a full range of USD products,â said Satish Nandapurkar, CEO of Eurex US. âWith our Russell index products we are adding a new asset class for our customers, creating low cost trading opportunities and offering them additional risk management tools.â Nandapurkar emphasized that the introduction of the products followed extensive consultation with market participants. âWe have had clear feedback that customers desire the additional arbitrage opportunities that will be offered by U.S. equity index derivatives on Eurex US.â "Traders increasingly embrace Russell indexes as the most objective and accurate picture of the U.S. stock market," said Kelly Haughton, strategic director of Russell indexes. "Their support for Russell's methodology has led to record growth in volume and increases in liquidity in Russell futures products. Listing these products on Eurex US will further increase their exposure to new market participants in the U.S. and Europe." The large-cap Russell 1000® Index measures the performance of the 1,000 largest U.S. companies based on total market capitalization. The Russell 2000 measures the performance of the 2,000 companies following the Russell 1,000 components and is the industry standard for U.S. mid-cap companies. Eurex US opened its market for trading on February 8, 2004 and currently lists futures and options on 2-, 5- and 10-year Treasury notes and on 30-year Treasury bonds. With the introduction of phase two of the Global Clearing Link, Eurex US will expand its offering to include trading in futures and options on Euro-denominated interest rate and index products.
I'm a member of EurexUS and I would be eligible for a kickback on every contract traded under my membership by the group if that incentive is offered for the Russell. I was intending to benefit from that program on the notes/bonds, but we never traded them (almost all of the size is fake in there). It would be great if we had a fee holiday and profit sharing program for index products as well.
The CME is pissed at this. I have heard that they do not feel threatened. However, they are coming up with a response to make sure market share does not go to EurexUSA. This is what I have been waiting for. No matter what happens with EurexUSA. This should drop fees at the CME. Unless they do not act. Then CME could lose market share. As far as CME's globex engine. It is good---a hell of lot better than then it was say--- 6 years ago! With that said, the idea that the CME has to charge non members the highest fees on earth to put money into software. Well I am not buying that one. And anyone that does buy into that should pull up a chart of the CME! The CME is doing good and could probably add more volume at a faster rate with lower fees for globex (for retail). It worked like a charm for the Cbot! And they saved off a threat from EurexUSA. If the CME is not carefull ---retail traders will line up for the ER1 and ER2. Institutions would LOVE to take the spoo business to Eurex USA and traffic in the Russell 1000. I do not know how close they are to each other (beta wise)---but know it is close enough. Merc has lots of Haters out east and they will be lining up to yell at the CME about fees when this starts. I will be watching and this can only be good for all traders. Futurestrader71, I take it you will be hooking up the Xtrader plug in that allows two exchanges for one market on one Mdtrader? for the Er2? How well does that thing work? I have not played with it. You know what talking about hopefully. I do not know the name TT uses for it. I am going to check into it. It is custom made for this type of thing. OH FY again, just in, the CME is raising the order protocal from 400 contracts to 1500 in the mini spoo. This will help kill the pit. The CME just issued that. Most traders do not know that when the mini spoo (and naz) first came out ---you could not do more than 30 at a time.