Looking at the CME website, there does not seem to be a way for a corporat entity e.g. a hedge fund to obtain CME membership as they are specifically excluded. Only proprietary tradng firms are allowed. Now there is the individual Membership...so my qeustion is even more pertinent. Can a fund Manager obtain an individual Memberhsip, then trade and give up to the fund...without this being considered cheating or a conflict of interest??
I think you are looking at http://www.cmegroup.com/company/membership/types-of-membership.html. Click on the drop-down box that says "Individual". You can select 3 other options. "Clearing" membership even offers discounted exchange fees for affiliated hedge funds. P.S. If your Web-browser disables scripts, enable them.
Yea, it can't be possible to get individual fees while giving up to a corporate account. If that was possible, there would be no corporate members.. ever. I was just confused by language in the CBOT fee schedule that said "rights of individual executing the trade".
I believe the CME also gave/gives a large rebate of your fees back if you trade in a LLC and meet certain conditions (without owning/leasing a membership). You may also want to check into this.
Can your fund be a corporate member? I'm trying to understand how a fund can be a corporate member as it seems except for the "Clearing Member" category, both corporate member categories explicitly prohibit membership by hedge funds.
when i looked into it for myself to trade all the treasury futures at member rate fees it broke down this way: just to trade my own money i had to buy an associate seat (80k ish last i checked) to trade my along with other people's money i would have to buy a seat and purchase 1700 shares of CME- i'm surprised you haven't mentioned this requirement yet, although if you aren't trading treasury futures maybe it doesn't matter. also everyone involved would have a minimum of 250k at risk and i couldn't take more than 80% of the total profit of the group.
It says it clearly on the CME site. Exact rule differs from exchange to exchange. In the CME, look at 106.H trading and 106.J equity memberships. It explicitly talks about funds and pools. CBOT would be 106.S membership.
from http://www.cmegroup.com/company/membership/types-of-membership.html: Also note that in both rule 106.J and rule 106.H, it says For hedge fund and commodity pool member firms, only the proprietary trading activity of the hedge fund member firm is eligible for preferential Exchange fee rates. In plain text it means whichever entity is the equity member, only this entity get preferential fees. So, if the actual fund is CME member, the fund is eligible for preferential rates but the fund manager firm is not. There is even special form for hedge fund membership: http://www.cmegroup.com/company/membership/files/CorpMemberHedgeFundInfo.pdf See also http://www.hedgeco.net/news/12/2004/cme-offer-new-membership-class-hedge-funds.html Or am I missing something?
Difference between CME equity membership (requiring CME shares - anywhere from 300k-1 mil in cost) and CME trading membership... Which does not. I have no idea what you're referring to: 250k at risk, etc. Doesn't sound like a hedge fund structure, in any case.
Thanks to all for all the good info. It seems if I have understood the material correctly: That if a hedge fund purchases an IMM seat or leases two IMM seast they can become a 106.H Trading Member. A trading memebr will then pay clearing fees of 0.39 for E-mini equities plus exchnage fees of 0.10 for a total of $0.49 per side as compared to $1.14 for non Trading Mmebrs. For FX products, the rate would be 0.34 + 0.10 for a total of $0.44 as compared to $1.60 for no Trading memebrs. The savings are great, if my analysis is correct! Are my numbers correct? However, the cost to puchase a seat (IMM) is at last trade $470,000 - which is no small investment. What is the cost to lease an IMM seat?? Thanks again to all for sharing.