Innovative future broker business model

Discussion in 'Index Futures' started by GeorgeSoros, Aug 18, 2002.

  1. This week I have met a UK broker which has a very interesting idea : They focus on ES & NQ

    If you decide to trade you pay 95$ for the day (debit at the end of the day)

    It allows you to trade 20 contracts (4.75$ RT per contract)

    Above this 20 contracts you just pay 1$ CME fees + 0.75$ clearing which makes all the contracts above 20 at 1.75$ R/T!!

    They plan to use JTRADER, and allow daytrading margins. They also plan to release an autotrader using JTRADER API for people who wants to do system trading...

    They told me their aim is to become number 1 broker for CME in 3 years.

    I liked the concept, I found it innovative, why is it not already done by someone else ???

    (Please don't email me for the name, I have to keep it secret)
  2. Why? There is a reason. It's a recipe for disaster. The cost per trade goes far beyond clearing and exchange fees. I hope they're a public firm as I can always use another stock to short.
  3. Beer Man

    Beer Man

    Somthing we can all look forward to is that down the road prices
    will come down significantly for these products. In the 90's,
    the cost of futures going down to the floors plummited and the same should happen with eminis as the competition to execute these producs is growing rapidly. My over/under for a r/t a year from now is $2.00
  4. I don't think so...It is based on their own existing customers statistics... The trick comes from some customers may pay 95$ but not used their 20 Roundtrips and so on...
  5. i am not a customer of them yest, but has a very exciting deep discount commission schedule. i have not switched because the only futures broker that have behaved without major problems for me is interactive brokers. so i will wait and see what the futures( a pun) holds for me
  6. "Above this 20 contracts you just pay 1$ CME fees + 0.75$ clearing which makes all the contracts above 20 at 1.75$ R/T!!"

    CME fees(including exchange clearing and NFA) are 2.32$/RT. How can they only charge 1$? Maybe that is a half turn charge.
  7. The best idea that someone on this site mentioned was, just have one exchange with millions of members and do away with brokers altogether.