I want to reduce my commissions!

Discussion in 'Energy Futures' started by automated, Jan 3, 2011.

  1. I just got done with my accounting. In 2010 I paid almost $50,000 in commissions to IB trading oil futures.

    Any one has any suggestions how i can reduce my cost of commissions?

    I do like the TWS, the way I am able to easily create and modify orders right on one line. Is there another broker out there that has lower commissions but uses a trading platform similar to TWS.

    I do not use and do not like the level II quote window.

    Thanks for ideas.
  2. rosy2


    if you're doing volume you can get cheaper commissions; that's no secret
  3. bone

    bone ET Sponsor

    I lease a Nymex seat for $1300 per month and pay $1.10 per round turn (buy and sell) all in - including FCM commission, exchange fees, NFA fees.
  4. Bone,
    Because this is ET, I'm sure you'd agree expansion of the leased seat/lower execution fees topic might be thought provoking for those special few...

    As you mentioned, there is the monthly cost of the seat. But then there are the increased fees for third-party data. Add a very likely increase for annual entity costs (accountants, lawyers, etc). And of course, taxes... As a seat leasee/owner, income from trading is considered earned income. Earned income is fully reportable and taxable, in addition to being subject to self-employment tax aka FICA. The earned income however allows for participation in qualified retirement plans as well as health and other benefits and deductions only available to those with earned income.

    Bottom line... there is a number for each trader where it makes sense to lease a seat. For me, that number is approximately 275K annual gross trading profit. That's based on my age, the tax-filing status of my trading business, the instruments I trade, and the style of my trading. You've got to put the pencil to the paper.

    Frankly, more concerning, is the OPs concern of a trading platform. :eek: Is there another broker out there that has lower commissions but uses a trading platform similar to TWS.
  5. Thank you Bones and TW.

    Bones, can you please give more info on Leasing. How, where to find one, is the lasing price same with every seller/lessor.

    TW, do you also lease one? The points you have made are perhaps all true. As a professional trader, is all profit then considered "ordinary income" as opposed to the mixed short and long term capital gain the futures are normally treated as? That would be a huge disadvantage. Of course the data fees etc are not that important if annual commission savings are in tens of thousands. Is there a source I can check to get more info on the subject.

  6. i believe velocity futures will help you with your membership
  7. I have never known of a broker who would not negotiate a customer's fees to keep the customer (except maybe Scottrade or that kind).

    It costs nothing to call and ask.
  8. It is my understanding (although I do not have personal experience) that an account that generates $50,000 or more in yearly commissions is large enough for most brokers to negotiate better raters than ANYONE posts.

    Decide who fits in terms of counter party risk and then talk to them by phone. You will save money and, who knows, you may end up with a platform you like as much or better.

    The key is to work the phone.
  9. Has anyone here in ET negotiated with IB for better rates than otherwise posted rates on their site?
  10. They will negotiate for far less than that, everyone has to be a whore.

    #10     Jan 4, 2011