So, "ALL-IN", how does IB compare ? Is IB cutting individual "deals" for high frequency / high volume traders ?
To lease an IOM seat it's currently around $950/mo. As a lessee trading equity index futures, it looks like your CME fees would be $0.46 per side ($0.21 clearing / $0.25 Globex) for up to 200 sides per day, and then $0.21 per side for each side in excess of 200 (daily Globex fee cap of $50). This would be added to whatever your broker charges for execution and clearing (IB average per side rate on 200 sides per day would be $0.855). That's an average R/T of $2.63 on 100 R/Ts per day at IB. http://www.cme.com/clearing/clr/fees/lessememp1870.html According to Robert Green's book, leasing or owning a seat means that all of your income is considered to be earned income on which you must pay FICA. Your income taxes on trading gains would still be the standard 60/40 for futures.
Okay, but that means an extra 12%, no? I just think that you really need to be doing alot of volume to make this worthwhile.
For 2007 the social security wage base limit is $97,500, so the maximum 12.4% contribution for the year would be $12,090; however, the 2.9% medicare portion would apply to all earnings. Someone might want earned income to take advantage of deductions on retirement plan contributions and health insurance premiums. I suppose the advantages would vary based on personal preferences.