Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
So get ready to pay an additional $15 per platform, per broker, per month in CME fees if you have a funded account.
But worse by a long shot is if you are a professional, or trade thru a corporation/LLC which is classified as a professional...., far worse due to the higher per-exchange fees (CBOT, CME, COMEX, NYMEX etc). $85 per platform, per broker, per exchange, per month!
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
Wait, am I reading this right? Is the individual paying $15 per platform per broker per month? Or are they paying $15 per platform, per broker, per EXCHANGE, per month, just like the professional?
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
See post 6 and 10. My understanding is the classification has been expanded to anyone trading out of a Corp/LLC. I am waiting to get more details on this.
Prior to 2014:
NONPROFESSIONAL SUBSCRIBER - "A Non-professional Subscriber" is any natural person* whom a market data vendor has determined qualifies as a "Nonprofessional Subscriber" and who is not:
(a) registered or qualified with: the Securities and Exchange Commission, the Commodities Futures Trading Commission, any state securities agency, any securities exchange or association, or any commodities or futures contract market or association, nor
(b) engaged as an "investment advisor" as that term is defined in Section 201(11) of the Investment Advisor's Act of 1940 (whether or not registered or qualified under that Act), nor
(c) employed by a bank or another organization that is exempt from registration under Federal and/or state securities laws to perform functions that would require him or her to be so registered or qualified if he or she were to perform such functions for an organization not so exempt.
Any person who does meet the above criteria (a,b, & c) is considered a Professional Subscriber.
After 2014, professional is expanded to be anyone trading out of Corp/LLC.
*There is substantial risk of loss in trading futures and options.
If you have any questions about the products or services provided by DeCarleyTrading, please send me a Private Message or use the futures.io "Ask Me Anything" thread.
The following 2 users say Thank You to decarleytrading for this post:
We haven't been told by CME that anyone trading out of a Corp/LLC, or even just using a business name, will be considered a Pro. That doesn't mean it's not true, just that we are waiting for clarification from CME on the Pro/Non-Pro rules.
Suggest any interested parties contact CME and/or CFTC directly with comments, as they may not be following futures.io (formerly BMT).
Robert
The following 2 users say Thank You to Robert Carrillo for this post:
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
Post #6 from Rosenthal seems to indicate that trading out of a Corp/LLC would consider you a professional. I am still trying to get confirmation for CME's actual description and what changes were made in 2014 to this.
I remember Milton Freidman once stating that monopolies don't last long in free market societies. Alternatives will sprout up. I guess we'll see if free our market is...
The following 2 users say Thank You to cshep for this post:
My guess is that while this will hit a lot of people, those who do serious volume will largely be unaffected (what's $50K a year extra when you are turning over $100K a day?), and hence will happily pay the new fees.
The following 3 users say Thank You to josh for this post:
with CME abysmal lack of of performance in the MF Global meltdown
(account are to reconciled at the end of end day with proof of money in the accounts)
and their other blunders they should be ashamed to increase fees.
Their costs haven't gone up - this is just gouging - absolutely no need for increase in datafeed costs
more people to Forex
..........
peace, love and joy to you
.........
The following user says Thank You to aquarian1 for this post:
More revenue per subscriber and lower dataserver/bandwidth overhead = more profit
They have been giving away cheap data for a long time with those waivers, now they want to cash in on all those people that they brought to the futures market, or drive them away if they don't want to pay and reduce their overhead.
This has been mentioned several times, and is one alternative. Another would be to position trade stocks/options, even with a <$25K account. You are allowed 3 day trades per 5 day period anyway, so you can take an occasional day trade if so desired. (Or, use a non-margin account but then you have to deal with freeriding, so best to just limit day trades and go margin account)
The following user says Thank You to josh for this post:
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
Similar move by Russell couple years back, went from free to 75/mo or something around there.
But this is not just a few bucks increase. The way it is structured, not per user but per platform and per broker really hurts the medium sized "small retail" guy.
funny how these fee increases were released when the nyse/ice merger was completed.
cme is a monopoly. it wont change because they have the politicians bought. cme is corrupt institution as are the other exchanges. when they went public it only became worse.
p.s. I am a member of the CBOT (now the CME). I don't trust the CME.
Just throwing it out there. Maybe this would be a great opportunity for IQFeed to do a webinar once all the new fees are set in stone later on in the new year. For instance explain and provide examples on how much it cost (dollar wise) to different parties (eg. the average retail investor, LLC etc.) and on various instruments. (E-mini, CL, etc.)
The following 2 users say Thank You to djoyce854 for this post:
@Robert Carrillo, can you share the logic behind your comment here? As I understand this thread, trading from a Corp/LLC is only a subset of the fee increase.
Since you did not address Mike's other questions, can I read that as you are waiting for confirmation from CME and/or do not think retail traders will see different fees?
----
Btw, I'm wondering why I, as an IQFeed customer, had to read this on futures.io (formerly BMT) and not receive an e-mail communication from IQFeed regarding new fees. Is there perhaps an internet page to register for such an e-mail communication? (Yes, I checked my spam folder ).
----
Furthermore, I see that IQFeed raises the CME fees with the +/- 15 dollar per exchange per 1 January for both professional and non-professional:
(So as Mike said, that would be $15 additional fees per exchange, per platform, per data feed, per month.)
But the CME waiver fee page has not changed, so the waiver fee is still continued?
And, is this fee increase related to CME's fee increase or not? I'm asking since, again, I was not informed by IQFeed about these new fees, so for all I know these new fees per 1 January might have been posted on that page before CME communicated the new fees.
Thanks in advance for clearing these things up.
The following 5 users say Thank You to Jura for this post:
The only thing that confuses me is the "per platform" cost. What is this? What platform? Is this related to brokers only?
@Jura, for what I understood by the documents @Big Mike posted, the waiver program will continue to actual clients till the end of 2014. The question is if those $15 per exchange will me charged outside the waiver program.
If I become half a percent smarter each year, I'll be a genius by the time I die
The following user says Thank You to arnie for this post:
I think most of the futures.io (formerly BMT) members are retail traders, right?
Do I understand you correctly that these traders have to pay 15$ per exchange(CL, ES for example or all products from your datafeed?), 15$ per platform (NinjaTrader???), 15$ per month (for whatever) and 15$ for datafeed (in my case zen-fire)?
I am really confused.
Hope somebody can clarify this.
For FX Traders: I know that the EUREX wants to introduce in 2014 a new FX futures market.
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
Current understanding means that if you use two trading platforms, say Sierra Chart and NinjaTrader, and you trade on two exchanges (say CME and CBOT) and say you have two brokerage accounts you actively used, then:
$15/per platform = $30
$15/per exchange = $30
$60 per broker, 2 brokers = $120/mo
So cost of $120 a month more in January. It's nothing compared to the cost of a professional, that is the major change.
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
BTW, I did not hear about it from any of my brokers. In fact, I heard about it from a broker on futures.io (formerly BMT) through casual email, where I don't even have an account.
I think this is largely in part to the way CME (purposely?) executed this, there are a lot of unanswered questions and such a huge negative response I think a lot of the brokers simply thought they would see changes that so far the CME is unresponsive to.
My understanding is that this impacts every broker, they will have to start collecting these fees in January.
I also think platform companies like NinjaTrader should be on top of this, because I think there is going to be a lot of confusion as to why people are paying for "platform fees" when they already lease or own the actual trading platform separately/directly from that vendor. The wording needs some improvement, but my understanding as of this email is the "platform fee" is better described as a "data fee" that is simply collected on a per-platform basis.
I think that's very customer unfriendly. While I can understand that the CME does not care much about smaller traders (since they have little contribution to CME's bottom line), I do not understand that companies that cater to retail traders (whether this being brokers or data providers) did not send an e-mail to their customers.
That's just good customer service, in my view (and actually, often required by the terms and conditions). Then we can also make adjustments, if needed. (This does, however, makes me quite grateful that you (Mike) in the futures.io (formerly BMT) e-mail newsletter, otherwise I would still have not know. Glad to see you're watching out for us. )
I use Mirus/Zenfire. I sent them an e mail wanting them to clarify what the new fees were. This is their reply;
Hello,
Thanks for your account with Mirus Futures.
You can find complete information regarding our rates at the following link. You will want to pay attention to the "all-in" columns. It shows the per-side rate. https://ninjatrader.com/ - Our Rates are all in including commission, fees, nfa and Zen-Fire data and order routing.
Regards,
Mirus Support
The following user says Thank You to dnkhoward2 for this post:
Yes those look like the current rates. I just e mailed a more stern request for what I will be paying on top of what I already pay. If I get any answer I will post it here.
The following 3 users say Thank You to dnkhoward2 for this post:
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
Give them a link to this thread, I've already emailed Eliot and Paul @ Mirus about this, they are aware of it but maybe the individual brokers there are not all aware of it yet.
Yes, I'd ask them the additional question, whether or not Mirus is going to charge us (clients) and what additional fees we could expect in any case...
"If you don't design your own life plan, chances are you'll fall into someone else's plan. And guess what they have planned for you? Not much." - Jim Rohn
The following 3 users say Thank You to Daytrader999 for this post:
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
Looks like an incomplete answer to me, either that or they don't believe they are subject to the data fee/platform fee collections. Which would be contrary to my current understanding of this.
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
Well they seem to be focusing on the contract fees, and not on the data fees. My understanding is the data fee applies to all brokers (all clients) and not just non-executing data providers like in the past (ie IQFeed). But I could easily be wrong, it is rather confusing at this state.
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
@mattz is usually responsive, maybe he can clear things up from an IB perspective in terms of executing vs non-executing and the new data fees for non-professionals and professionals.
Thanks Mike, I have scheduled a call with a number of people for the next 24 hours to get accurate details of what increases will take place and their impacts on customers and individual brokers. I just want to be accurate before I post anything.
The feeling that I have is that changes will take place and they will not go away.
Matt
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email support@OptimusFutures.com
The following 4 users say Thank You to mattz for this post:
That's also my understanding so far, but perhaps they will establish more dependencies regarding the relation between the (increased) cost of data fees and brokerage revenues for the particular client...
"If you don't design your own life plan, chances are you'll fall into someone else's plan. And guess what they have planned for you? Not much." - Jim Rohn
Looking at the full market structure; The guys making 100K a day rely on the smaller traders to make that money. If a significant number of traders / firms are driven out of the market then the majority of them will no longer be making 100K a day. I would even bet some of them would go belly up.
The other thing to consider is how many algos will no longer make money with the new fee structure. Many of them make pennies per trade but execute tens of thousands of trades per day. Their narrow profit margin would effectively be wiped out with the increases.
IMO- these fee increases will drive the volatility out of the market. You will be left with the traders / firms who can afford it and the current algos which will likely feed upon themselves due to the decreased volatility, until they drive themselves out of existence.
Robert
nosce te ipsum
You make your own opportunities in life.
The following 2 users say Thank You to Silver Dragon for this post:
I just want to say thanks to Big Mike and to all who contribute here. If it wasn't for this forum/thread, alot of us would be taken aback with these fees having not been given ample warning about them.
At least I have time to digest what is going on opposed to being blind sided with them without much notice.
Thanks
The following 4 users say Thank You to dnkhoward2 for this post:
I don't think this result is guaranteed. The per platform thing I think can be over-ruled by the per device clause for the purpose of user count. If I was a data vendor that would be my interpretation (as long as the data was going to the same IP address and requested by the same computer ID, I wouldn't care how many different pieces of software were using the data.)
I am unsure of how getting data through a broker and also a vendor will work (that way I have backup data), that may be two exchange fees, dunno. And for the guys that have multiple brokers, dunno how that will work either.
I feel sorry for the guys that have made a business out of trading literally, corp., LLC, etc. Good planning is turning into a good screwing. The only real option to reduce costs is to abandon the legal protections to save the excessive exchange fees...ridiculous.
I get the feeling that they(CME) know, no matter what fee increase they put out, there will be an uproar. So they put out the worst case scenario first and survive the initial sh*tstorm. Then, if they back off even half way, they are still ahead and the customer will let out a sigh of relief knowing it could have been worse. At that point many will live with it.
Your right,... still, HFT's make up 60% of all CME volume. Thats why they targeted them in their rate changes. If the 40% who are left is reduced who are the HFT's going to feed off of? Somebody is going to lose regardless.
Robert
nosce te ipsum
You make your own opportunities in life.
The following user says Thank You to Silver Dragon for this post:
Great information, like many others here Id like to thank Mike for getting this upfront so we can be forewarned and ready to rethink our costs.
I don't say much, I read a lot!
On Monday, I saw the email we are sending to all IQFeed/DTN.IQ customers regarding improvements made during 2013 and 2014 pricing. It will be emailed this week. We always send this letter during the first week of Dec (along with changing prices on our site to reflect 2014), and this year is no different.
First couple paragraphs from it:
What is different is that CME Group is raising fees and stopping the waivers program. It's been in the news since Nov 12,
The reason we didn’t send communication to our customers or comment on forums is because there are multiple moving pieces and we don’t want to provide inaccurate info while we gather more details. You all know I like to have the facts straight before commenting. Conjecture and rumors don't help anybody.
It's important to remember that for traders with waivers, this is a non-issue until Jan 2015. You will keep your waivers through 2014, and that is true for anybody who gets waivers prior to Mar 1, 2014.
We received the Pro/Non-Pro rules from CME today. They reflect the rules Mike posted from CME, with no mention of Corp/LLC, but we are asking for clarification on that since the RCG letter mentioned it . We'll advise as soon as we know more.
Regarding the IQFeed site showing $91/mo for CME Group Non-Pro's, that won't matter until Jan 2015. It will be updated well prior to that to reflect the lower rate. I learned in a meeting about this earlier today, that in order to qualify as a Non-Pro, you not only need to answer "No" to all the questions on the CME Group form, but you also have to be qualified as for the old waivers program. Assuming you still have waivers come Jan 1, 2015, and have answered the CME form as a Non-Pro, you will get the lower Non-Pro rates eff Jan 1.
Since one needs to "qualify for waivers" to be a Non-Pro after Jan 2015, the CME Group Waivers page on the IQFeed site will remain but be changed to reflect "CME Group Non-Pro Qualification" page or something to that effect. The same steps will be required but for a different purpose. Instead of brokers verifying funded accounts to permit waivers, it will be to permit Non-Pro status.
This is a big transition for all of us, and we will continue to keep everybody informed with facts as we get them.
Thanks.
Robert
The following 6 users say Thank You to Robert Carrillo for this post:
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
Algorithmic, or HFT? Big difference. I figured algorithmic was more like 80%, but definitely not HFT. Honestly I could be way off, I don't really focus on that.
I am not sure on the algo vs HFT.. to me they are the same. In the article below they refer to HFT trading in milliseconds and microseconds. This has to be Algo to trade this way.
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
Not the same. Most executions are algorithmic, but it has nothing to do with high frequency or low latency. It has to do with the banks and firms wanting to get the best price for their clients so they use sophisticated formulas instead of just dumping big volume when an order comes in.
I cannot think of any article that reliably has facts that really break it down by a profit center, firms that make their money on algo trading vs HFT trading.
The $15 platform fees per exchange + clearing fees will be a significant cost to a retail trader if added over a year.
However the same future contracts are available on ICE and NYSE-Euronext.
I don't think you'll find comparable ICE and CME contracts to be the "same" even if contract specs are close or identical. I wish that were true, but unfortunately CME has the volume in many of the popular futures markets. That makes a big difference.
The following user says Thank You to kevinkdog for this post:
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
I spoke with Eliot at Mirus Futures, he has a meeting with the CME tomorrow and once he has more info on some key issues, his team will disseminate it.
Site Administrator Swing Trader Data Scientist & DevOps
Manta, Ecuador
Experience: Advanced
Platform: Custom solution
Trading: Futures & Crypto
Posts: 50,068 since Jun 2009
Thanks: 32,534 given,
98,491
received
Just an update for today.
After talking to some people again today on this, my general impression is the CME is clueless about retail traders (the one thing everyone seems to agree with).
I cannot say whether or not they are going to make changes to their policy.
But some clarification I did receive from multiple sources did indicate to me, in my opinion, that the $15 per-platform fee (ie "primary" and "backup" platforms) is not correct and it is a per-broker fee. But this is just my interpretation, who knows at this point what the final language is going to look like.
I believe that the brokers, platforms and data feed providers on futures.io (formerly BMT) are on top of this issue and that any delays are on the CME's side, so please cut them some slack and try to understand what they are dealing with.
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.
-Bob
The following 11 users say Thank You to bob7123 for this post:
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).
The following user says Thank You to Jura for this post:
..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."*
