Questions About Future Commissions

Discussion in 'Trading' started by macattack, Mar 27, 2012.

  1. When a futures broker says they'll match or beat any published commission what exactly does that "commission" include?

    My statement says:

    Total Commissions & Fees: $33.84
    Exchange: $17.40
    NFA: $0.24
    Clearing: $6.00
    CQG Trf: $1.20
    Commission: $9.00

    So if I take 6 trades & divide by $33.84 that equals $5.64 round trip.


    If I take 6 trades & only divide by the commission of $9.00 that equals $0.66 per round trip.

    (I just quickly found a broker advertising $1.99 per side. Is that better or worse?). Thanks.
  2. tiddlywinks


    One - your commission math is incorrect. 9/6 = 1.50
    Two - What is 6 trades? 3 roundtrips = 6 sides/trades. 6 roundtrips = 12 sides/trades. 6 trades = 6 sides.

    According to your fees & commissions the two areas you may have negotiation power is your CQG transaction fee and commission, all dependent on your monthly volume and the brokerage desire to keep you as a client. The other fees can be reduced if you have a membership in the exchange/exchanges of the products you trade.

    Commission is the brokerage commission, nothing else. You are looking for an "all-in" price per side. If 1.99 per side is all-in, then yes it's a better deal.

    FWIW: if you are trading US index futures, 2.82 all-in per side is no deal! But commissions and fees should not be a standalone deal breaker.
  3. Normally for futures "brokers commissions" excludes exchange fees, platform fees and NFA fees and includes any broker clearing fees.

    Your mathematics leaves much to be desired. You divide by number of contracts, not by dollar amounts.

    $33.84 divided by 6 contracts RT equals $5.64 RT.

    $9.00 divided by 6 contracts RT equals $1.50 RT.

    $6.00 divided by 6 contracts RT equals $1.00 RT.

    So you are paying your broker $2.50 RT in commissions plus $0.20 RT for CQG.

    You are paying too much. Interactive Brokers commissions start at $1.70 RT with free platform. Lightspeed commissions start at $1.20 RT with free platform. And there are a number of brokers with RT commissions in the range of $1.20 to $1.70. You can get lower commissions if you pay for a platform or do high volume.

    Without knowing what the $1.99 a side includes or excludes, no answer can be given.
  4. Thanks for correcting my math. :)
    6 trades was 6 round trips trading CL - Oil.

    I didn't understand exactly what you were $5.64 the "all-in" price? Is $2.82 (price per side) the number I want to compare to other brokers? Thanks.
  5. Thank you also !

    All I can do is laugh at my math skills tonight. I'm completely exhausted, so the brain isn't working well. :)

    I sent the broker an e-mail to get the commissions lowered, so we'll see what happens.