Stage 5 Trading's Anthony Giacomin (Managing Partner) - Ask Me Anything (AMA) | Reviews of Brokers and Data Feeds


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Stage 5 Trading's Anthony Giacomin (Managing Partner) - Ask Me Anything (AMA)

  #7 (permalink)

Taipei/Taiwan
 
Trading Experience: Beginner
Platform: Multicharts/NinjaTrader
Broker/Data: AMP/CQG
Favorite Futures: ES
 
Posts: 42 since Oct 2011
Thanks: 139 given, 25 received

Thanks so much for the info.
I have seen the webinar FT71 presented, the way he trade is quite fast very similar to mine currently experimenting.
That might have a number of trades up to 30 or 40 in a short time,, my issue is that my MFE and MAE is not in a large ratio, so the fees take a lot of portion for the profit.
I know some pro guys trade for securities,, their commissions is even negative,,...
will you or FT71 trading by leasing a member? Thks.


Stage5 Anthony View Post
Hi @steelchueh,

This is a great question. I just had a meeting with @FT71 to go over the membership spreadsheet to analyze multiple scenarios where traders may benefit. The good news for traders who execute 200 round turns per month the lowest cost structure is being a Non-Member! The reason this is the case is because if you become a Leasing Member traders have to pay the $2,000 up front application fee and then the monthly lease fee (As of today, 10/24/2104, the CME shows the current costs of IOM leases are $325 per month). These additional fees would raise the total cost per round turn.

Let's look at an example. Currently, Non-Members pay $2.32 per round turn in exchange and NFA fees to trade the ES, YM, or NQ. $2.32 will be our constant as it doesn't change for Non-Members.

To Lease and IOM membership the trader would currently pay:

First Year Costs

$2,000 as a one time application fee
$325 per month to lease the membership
$325 * 12 = $3,900 to lease for a year
$0.42 Clearing Fee per round turn
$0.51 Globex Fee Per round turn
$0.42+$0.51 = $0.93 Total Fees paid per round turn
200 Round Turns per Month = 2,400 round turns per year

Total Year 1:

$2,000 + $3,900 + ($0.93 * 2,400) = $8,132 / 2,400 RT = $3.39 per round turn in costs for traders who Lease an IOM vs. $2.32 for Non-Members

Total Year 3:

Let's look at what our costs would be as a leased member 3 years into the program when we have had more time to absorb the $2,000 up front application fee. Assuming the monthly lease fee stays constant at $325 a month, the numbers for this calculation stay the same as above except the annual volume and annual lease fees are multiplied by 3.

$2,000 + ($3,900 * 3) + (($0.93 * (2,400 * 3)) = $20,396 / (2,400 * 3) = $2.83 per round turn in costs for traders who Lease an IOM vs. $2.32 for Non-Members

The break even for a trader calculating off the first year of costs would be 354 round turns per month.

One thing to consider with memberships as we move forward into 2015 is that the CME classifies a trader as a professional if they have a membership. As the CME moves towards charging traders for CME market data the difference between a professional trader and a non-pro classification can be substantial. A non-pro will be able to get Level II market data for the CME, CBOT, NYMEX, and COMEX for a total of $15 per month. This is $5 per exchange with a break for all at $15.

Professional traders are going to have to pay $85 per exchange for Level II market data. Professionally designated traders who subscribe to all the same exchanges as mentioned above would pay $85 * 4 = $340 per month vs $15 for the Non-Pro. This is a difference of $325 per month. Please keep these thoughts in mind as you analyze the best solutions available.

I hope this helps. Please feel free to contact me should you have any questions about anything or if we can help with anything in addition. Stage 5 - Contact

Have a great weekend.

Best,
Anthony

Anthony Giacomin
Managing Partner
Stage 5 Trading Corp.
55 W. Monroe Street, Suite 1190
Chicago, IL 60603
Tel/Fax: +1.312.896.9897 | 1.800.258.6675

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past performance is not indicative of future results.

Disclaimer: The information contained herein is believed to be accurate, however, Stage 5 Trading makes no representation as to the accuracy of the information contained herein.