Hey all, I trade fairly heavily in the ES through IB, and paying $3.20 - $3.60/rt is starting to cut deep. So I was thinking an leasing a seat might be the way to go. I checked the CME website but couldnt find anything on membership (maybe I'm looking at the wrong page). Would anybody with experience or knowlegde about this kindly help on the following q: 1) Whats the difference between CME, IMM, IOM, GEM seats? My volume is mainly on the ES, and GME appears to have the lowest leasing cost. Would that work for me? 2) How is the application process like? I don't reside in the U.S. - hopefully this is not a problem. 3) Once I manage to lease a seat, do I have to go through speaciaized brokers, or can I continue to trade with IB? 4) Speaking of IB, do they offer decent rates for futures trading? Thanks in advance
http://www.cmegroup.com/company/membership/index.html On the home page for the CME it was on the middle right side of the page. In my opinion you might be better off finding another broker if you are doing the kind of volume to make a lease worthwhile. Not sure if it is ok to post other non sponsor brokers, so I won't. Other brokers will help you through the process and offer very good rates, easily comparable to IB's posted rates. Under Resources at the top of the CME home page is a link for Find A Broker. You can start calling that list and looking up issues at the nfa.futures.org. Good luck
Use the ECM membership as it is more cost effective and the due dilligence on the part of the exchange is not as "probing" since you are not really a member. To lease a seat (or purchase) you would need to go thru the whole review process and be sponsored. http://www.interactivebrokers.com/en/p.php?f=commission&p=f&p2=futures6 On the above link, IB has a link to the application. ECM is cheaper than membership, but the exchange fees are a little higher than if you were a member. The only requirement is that you avg 50 rt a day in volume to get the discount. Once you have this ECM, you are not tied to IB, you could use it for other brokers as well and I believe pool the daily volume requirement. Aslo, if you look at the unbundled breakdown on IB's commission schedules, for the ES, which you trade, the exchange fee is the same whether you lease a seat for a few k a month, buy a seat for, what 7 figures?, or use ECM plan. But understand, the ECM is for trading your own proprietary funds, not anyone else's. http://www.cmegroup.com/company/membership/files/ECMQA.pdf
Sadly the ECM-W scheme you are refering to comes to an end in Dec 2010. Only the ECM-H scheme will continue into 2011.
It was supposed to come to an end in 2008 also. Depending on where we are at by Dec 31, may be extended again, but once you get it, you got it.
Really? When I spoke to the Merc about it a few months ago I was told that all benefits conferred by the ECM-W scheme would cease. Have you heard differently?
Thanks for the tips. I've shot an email over to support at CME. I didn't realize IB had such high rates for futures commissions until I started looking around. Looked at Variance, AMP and Advantage - all 3 are about 20-25% discount from IB. How are people's experience with those 3? pcp198, IB charges a flat rate of $4.00 / rt with no volume requirement if you're not an active trader. The price you're paying seem to be on the very, very high side.
Here are the links you are looking for: http://www.cmegroup.com/company/membership/files/CME-Product-Listing-By-Division.pdf Brief summary: CME full membership: all products IMM: FX futures, index futures, STIRs (e.g. Eurodollars), all options IOM: index futures (ES, S&P etc), all options GEM: fuck all. Brazilian Real (dead contract), Mexican Peso (active, 20-30k a day volume), GSCI Index (100-300 a day volume), South African Rand (dead), non-farm payroll futures (dead), housing futures (dead) If you want S&P then the IOM is best, pricing for purchase and lease can be found here: http://www.cmegroup.com/company/membership/membership-pricing.html Use the scroll-down menu to go from bid/offer prices to recent lease prices and leases presently available. IOM is 150kish at the moment, and leases for $500-600 per month, that's about a 4-5% return on capital, but ownership gives better rates, so the decision depends on your trading volume, anticipated savings, and spare cash. Seat prices can be very volatile so I would lease first and then maybe try to pick up a seat only when they get to a discount to recent prices. Leasing is certainly much lower risk. The application process is pretty simple, I wouldn't be put off by it. Also it's a decent thing to have on your CV/resume if you're involved in trading IMO. You need to contact IB about passing throught the savings. There are plenty of other brokers though, some with lower costs and better software for intraday futures trading.