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After sending a message to Interactive Brokers regarding proposed changes to CME Fees, I was given this response:
"Dear Mr. Joyce,
If you are referring to the market data fees:
IB has no plan to change the existing fee structure for US Bundle (NP,L1), which includes GLOBEX futures data. You would have to check Ninja to see if they would be increase the associated data fees on their end.
If you are referring to the CME exchange fees:
IB has no plan to modify our existing commission structure for US futures, which is 0.85 USD per contract plus exchange fees. According to the link below, CME may slightly increase trading cost for selected number of contracts. IB would pass on the additional cost to you for related executions.
I got a notice from DTN/IQFeed that fees would be increasing, so I contacted Robert Carrillo, my account manager. Below is a distillation of a series of emails and calls we had.
As an aside, the DTN notice also mentioned that they had increased the tick storage size from 120 to 180 days. If you use the BaBAR tool, I just released a patched version that allows you to take advantage of this.
The conversation:
--------------------------------------------------------
Before going into my understanding of my account, I wanted to clarify that when I say increased fees, I mean fees that I am paying now, which will have their value adjusted upwards, whereas when I say new fees, I mean fees that were not assessed before.
For 2014 will I face increased fees?
Will there be new fees as well, for 2014 and/or 2015? Perhaps not new fees, but will the waivers go away at some point?
If someone in 2014 said “I’d like the same services Bob gets,” how much would they pay for new service? (Would it be the same or more than what I pay?)
I have an older futures account with [Broker A] which I might close and move the assets to my account with [Broker B].
[Broker A] is the account that my fee waivers are attached to. If I close the account during 2014, will I lose my grandfathered status? Perhaps I should move my fee waivers to [Broker B]?
One of the selling points of having IQFeed is that I use it with NinjaTrader, and have the option to use other platforms as well. As I was reading the futures.io (formerly BMT) thread, it seems I may have to pay for each additional platform. Is that correct, and if so will it start in 2014 or 2015?
I also have the IQFeed API and wrote a simple app called BaBAR to make connections and download data. BaBAR is available to futures.io (formerly BMT) elite members. Will I and other futures.io (formerly BMT)ers need to pay additional fees to run this and perhaps other applications I develop?
When I signed up, I maxed out and got all data that was waived. (It was for free so why not?) I realize 2015 is a ways off, but when we get there will I be able to receive some or all of the data currently being waived on a delayed basis?
Finally, come 2015, how often will I be able to upgrade or downgrade my subscriptions?
When I got to the end of this I realized I did not ask about LLC trading. I have an email into him on that now, he may reply to me or to the thread directly.
Facts:
1) CME is monopolist for US futures
2) There are many traders of any size
3) A high liquidity in the markets are attracting more traders
4) Fee pricing tends upwards
5) Uncertainty is obvious for every client
Conclusion:
a) Uncertainty is poison for money markets
b) The fee question for traders is primordial to stay above waters
c) If clients are leaving the boat (forced or unforced) - the liquidity in the market will shrink
d) Shrinking markets lead to less volatility aka less possibilities for good trading chances
What does it mean to me?
Under these premises every "homo oeconomicus" will decide to:
- leave this market / provider much sooner than later (or too late)
- checking for alternative markets - scanning alternatives and discuss them here on futures.io (formerly BMT)
- hop on the new boat sooner than later to profit longer
GFIs1
who thinks to have understood "THIS CME signal"
I agree with your facts, but disagree with what does this mean to 'me'/traders. Alternative FX futures, such as those on ICE and Eurex (discussed in this thread), simply don't have (enough) liquidity to make 'leave the CME market' idea an viable one.
The additional data costs for a non-professional trader (taken from Mike's post here) are very limited:
Or, in other words, this can also be seen as a small liquidity premium embedded in the data costs.
I don't think these costs are hefty enough to trade instruments with far less liquidity (but I might be mistaken).
..maybe we try to distinguish between FX and index futures:
even I am not following the fx - the mentions about the index futures should behave quite similar for fx.
Market participants do follow a certain pattern - unregarded the specific market.
I do not think I understand you. What do you mean with 'mentions about the index futures should behave quite similar for fx'?
Furthermore, that market participants follow a pattern is an obvious statement, but I do not see how that's relevant here. What kind of 'certain pattern' are you talking about?
only about homo oeconomicus behaviour - (as mentioned)
..should be the same in every market.
see Wikipedia:
"Homo economicus is a term used for an approximation or model of Homo sapiens that acts to obtain the highest possible well-being for him or herself given available information about opportunities and other constraints, both natural and institutional, on his ability to achieve his predetermined goals. This approach has been formalized in certain social sciences models, particularly in economics."*
