I just wanted to say THANK YOU Bighog, I have learned alot from your posts I hope you continue to write....and not let some idiot who cannot even spell half the words in his post's bother you ! Your posts are good stuff ! Keep it up !
Make sure your system is profitable. Backtest or keep your size small until you are sure. If you can't trade one car successfully, increasing size won't help.
No live trades. Sim trading ATS strategies for optimum time frames and exit strategies. Getting very close now with the ATS-in-testing.
http://www.cmegroup.com/company/membership/membership-pricing.html Nod, check this out : Lease a seat for about $900 a month but can chop $500 off that by saving on the x-trader monthly. About time i woke up to way cheaper commissions, fees. In the box that says Membership pricing, drop it down to lease prices. Click on IOM
If you buy the membership, does that mean you can lease it out and trade at the same time or can only one person use it at a time? Do people lease it out when they are on vacation?
One person at a time. Use it or lease it, not both simultaneously. Some people lease it out when on vacation, some don't bother, some lease it out permanently for income. There are costs to process the lease, as well as to initially obtain membership. It's not click and play. Takes a few weeks, as well as at least one visit to Chicago, FBI screening, and several other time-wasting tasks, if I remember correctly. My guess is that a large enough trader can negotiate with his broker cheaper commissions than the ones displayed. Even larger traders establish their own clearing firms, etc. Focus on getting bigger size profitably which is the more difficult and important task, than wasting time and money and effort getting a cheaper deal. Everything else follows that. IMHO.
They charge a one time application fee of $1,750 and a fee of $500 for whatever. The paperwork etc is mostly handled from the broker you will use. I am looking at ADvantage Futures because they are a Chicago firm and have office in Downers Grove (western burbs). This subject is new for me because i am late to the party of commissions all-in-round turn about $2.14 a car. Advantage does prop also but i do not need or want that. http://www.advantagefutures.com/Proprietary_Trading_Firm.html
I remember that the breakeven point, including pain-in-the-ass costs, hidden costs, time wasted, visits, etc. pro-rated for a year came to about 2,000-2,500 contracts per month when I calc'd it for myself. I suspect that whenever I get to that size (slim chance at this point to be sure) I could begin considering it again. The breakeven point may be lower for you if you live in Chicago. I think below 1,000 RTs per month is just a waste of time for most people. The lease cost is subject to change as well. All is peanuts if one can trade size profitably. People that trade size that I know don't bother with memberships, they just negotiate their rates with the brokers. No red tape, no FBI, no compliance crap, no exams, instant results. I'm sure if one becomes huge, one would even consider a clearing firm membership (for both rates and privacy of positions, etc). I believe Tom Baldwin from the Bond pit had one, back in the days just to clear his own business. IMHO membership is a waste of time for 99% of people, especially in these days of cut-throat commission competition amongst brokers. I may be wrong.
Well, with commissions of approx $3.50 RTurn i agree there is no real advantage to lease a seat unless you do at least 100 cars a day. I decided to look into this because i plan on trading with a relative come next year. We together can do some very good cars a day, assume 20 cars a day on seperate trades each (40 per trade) trade and many will be 40 cars. I average 5 trades a day now . Do the numbers. Also, i am not concerned about lease prices going up or down. What bills do you pay that do not go up? :eek: PS: Whiskey, lighten up. I am not a SIZE trader, i am a piker. Expenses are just a way to do business. I am never interested in stroking some brokerage to beg for a break in commissions. Screw that. If i wanted to kiss the mans ass, i would have taken a regular job and retired on peanuts. Trading was a plan to tell the "MAN" to take his corporation and shove off.
What I'd do in your case is the next day after pushing large volume, call your broker and negotiate him down to the floor in rates. then compare those with membership rates and the hassles involved, and then make a decision. The size you speak of is borderline, much bigger size merits membership on a cost basis perhaps for a US based person. For people that trade outside the US is no contest, for tax reasons. Good luck with it.