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CME Fee changes 2014, significant impact


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CME Fee changes 2014, significant impact

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  #1 (permalink)
 Big Mike 
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See:
https://www.cmegroup.com/company/files/2014-fee-changes-summary.pdf

This was the proposal. My understanding there has been a lot of push back, so we may not see all these changes.



The $15 per platform per user fee could be a problem for some traders (or their brokers).

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 Big Mike 
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CME Group stands by fee hikes as brokers protest - chicagotribune.com

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 Big Mike 
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If you are a professional, they want $85 per platform, per exchange, per month in new platform fees.

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 Big Mike 
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Data Fees Kick CTAs and IBs When They're Down | Dan Collins Report

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 Big Mike 
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http://dancollinsreport.com/cgi-sys/suspendedpage.cgi



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 Big Mike 
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https://www.cmegroup.com/market-data/distributor/files/market-data-policy-changes-2014.pdf



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 Big Mike 
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If I read it right, they are discontinuing the CME fee waiver program as well.

Maybe @Robert Carrillo can confirm if I've interpreted that right.

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 Cogito ergo sum 
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Time to buy some CME stock

This is one way to gain some revenue growth assuming that there won't be a substantial reduction in volume.

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Rebuttal from Carley Garner @decarleytrading, posted with permission



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 Big Mike 
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 Big Mike 
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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!

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Big Mike View Post
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!

Mike

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?

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Big Mike View Post
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?

Mike

Hoping one of the brokers can clarify, maybe @decarleytrading is around, or one of the others?

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 dnof 
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If these costs are as being described here, the costs are huge for most.

personally I will move to other markets, such Forex or even to leveraged ETF's.

CME will shoot themselves in the foot here.

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dnof View Post
If these costs are as being described here, the costs are huge for most.

personally I will move to other markets, such Forex or even to leveraged ETF's.

CME will shoot themselves in the foot here.

Trading out of an LLC is going to cost me around $27,540 a year.

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 paps 
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Mike...what defines a professional?

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paps View Post
Mike...what defines a professional?

Thnx
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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.

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 dnof 
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Big Mike View Post
Trading out of an LLC is going to cost me around $27,540 a year.

Mike

Yip - about the same for me also

Still can't believe that this holds and gets implemented, but if so we should also be proactively managing our indiviual trading and business plans.

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great, it will drive more people to uncharted frontier... Forex.

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Big Mike View Post

After 2014, professional is expanded to be anyone trading out of Corp/LLC.


Sorry for my ignorance, but can you explain what that means - "trading out of Corp/LLC"?

It seems the waiver will continue to actual clients till the end of 2014?

I hope they set the new fees straight because it's way too confusing at the moment for retail traders to know what will be their costs in 2014.

Brokers will raise their commissions. Data fees, like IQFeed will raise their fees...

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 paps 
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Thnx Mike.

Well hoping for the best. Will create too much fees where data starts becoming cost prohibitive.

Thnx
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Big Mike View Post
Hoping one of the brokers can clarify, maybe @decarleytrading is around, or one of the others?

Mike

Sorry, I missed this earlier but it sounds like you have it correct in a later reply.

Be sure to send your opinions to marketdata@cmegroup.com and info@cmegroup.com. Hopefully the CME will come to their senses and look at the big picture.

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 Robert Carrillo 
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Big Mike View Post
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.

Mike

Mike,

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

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Big Mike View Post
Trading out of an LLC is going to cost me around $27,540 a year.

Mike

time to be a sole proprietor again I "was" going to LLC for 014, thx for posting info

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 shodson 
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decarleytrading View Post
Be sure to send your opinions to marketdata@cmegroup.com and info@cmegroup.com. Hopefully the CME will come to their senses and look at the big picture.

Looks like they are not willing to listen

CME Group digs in on fee increases as brokers protest | Reuters

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 Big Mike 
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Robert Carrillo View Post
Mike,

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

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.

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 cshep 
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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...

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 josh 
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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.

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 Big Mike 
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josh View 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.

That does seem to be the result. Wonder if it was somehow the aim?

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 aquarian1 
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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

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 aquarian1 
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decarleytrading View Post
Sorry, I missed this earlier but it sounds like you have it correct in a later reply.

Be sure to send your opinions to marketdata@cmegroup.com and info@cmegroup.com. Hopefully the CME will come to their senses and look at the big picture.

Thanks Carley,

Ive sent my scorcher. I hope others in the forum don't just complain to each other here but also send their emails

Happy Holidays

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 Luger 
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Big Mike View Post
That does seem to be the result. Wonder if it was somehow the aim?

Sent from my LG Optimus G Pro

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.

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 josh 
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aquarian1 View Post
more people to Forex

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)

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 Big Mike 
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Luger View 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.

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.

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 aquarian1 
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The fees and transaction costs are bad enough as it is - the increase in datafeeds is another big cost

Gouging like this is ugly.

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 aquarian1 
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yes josh I know others mentioned forex I was adding it in again
--perhaps a CME bonehead is reading..

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 Futures Operator 
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Would ICE exchange data/fees be affected? If not, they could be another alternative for futures traders, along with EUREX.

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emini2000
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Big Mike View Post
So get ready to pay an additional $15 per platform, per broker, per month in CME fees if you have a funded account.

Mike


Could someone explain this? What is meant by per platform, per broker? I'm an individual trader, so what does this mean to me?

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 tflanner 
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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.

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 djoyce854 
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emini2000 View Post
Could someone explain this? What is meant by per platform, per broker? I'm an individual trader, so what does this mean to me?

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.)

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 Jura 
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Big Mike View Post
If I read it right, they are discontinuing the CME fee waiver program as well.

Maybe @Robert Carrillo can confirm if I've interpreted that right.


Big Mike View Post
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?


Robert Carrillo View 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 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:




Source.

(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.

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 Laurus12 
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decarleytrading View Post
Sorry, I missed this earlier but it sounds like you have it correct in a later reply.

Be sure to send your opinions to marketdata@cmegroup.com and info@cmegroup.com. Hopefully the CME will come to their senses and look at the big picture.


Did a simple e-mail to the CME with the listed e-mail addresses:


Quoting 
Subject: Regarding the 2014 Fee Changes Summary

Dear Sirs or Madams,

No offense intended, but based on the principle "more customers equals more profits" I believe without a doubt that CME Group Inc is going to loose a lot of traders by going forward doing this. I think this will be a "shoot your self in the foot" act.


Best regards,
.....


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 arnie 
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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.

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 Balanar 
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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.

https://www.eurexchange.com/blob/exchange-de/3986-146242/632326/4/data/presentation_fx_derivatives_at_eurex_exchange.pdf

https://www.eurexchange.com/blob/exchange-de/3986-146242/634086/4/data/factsheet_fx-futures-and-options-at-eurex-exchange.pdf

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 Big Mike 
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emini2000 View Post
Could someone explain this? What is meant by per platform, per broker? I'm an individual trader, so what does this mean to me?

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.

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 Big Mike 
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Jura View Post
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 ).

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.

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 Big Mike 
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arnie View Post
The only thing that confuses me is the "per platform" cost. What is this? What platform? Is this related to brokers only?

Not 100% clear to me either. I just got into this yesterday, so hoping for clarity to come soon through proper channels.

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 Big Mike 
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Would you start a separate thread in Brokers section for this, it deserves its own topic.

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 Jura 
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Big Mike View Post
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.

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. )

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 dnkhoward2 
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Morning All,

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

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 Balanar 
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dnkhoward2 View Post
Morning All,

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

This looks like a "standard response" to me.

Ask them again. These rates are the actutal ones.

I bet the customer service is confused about the new rates as well. (lol)

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 dnkhoward2 
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Balanar View Post
This looks like a "standard response" to me.

Ask them again. These rates are the actutal ones.

I bet the customer service is confused about the new rates as well. (lol)

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.

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 Big Mike 
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dnkhoward2 View 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.

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.

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 dnkhoward2 
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Hello,

Thank you for your inquiry. You can find more information about the CME fees on this page: https://www.cmegroup.com/tools-information/lookups/advisories/ser/SER-6913.html

Please let us know if you have any additional questions.

Regards,

Mirus Support

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 Daytrader999 
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dnkhoward2 View Post
Hello,

Thank you for your inquiry. You can find more information about the CME fees on this page: https://www.cmegroup.com/tools-information/lookups/advisories/ser/SER-6913.html

Please let us know if you have any additional questions.

Regards,

Mirus Support

Great answer, really...

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...

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 Big Mike 
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dnkhoward2 View Post
Hello,

Thank you for your inquiry. You can find more information about the CME fees on this page: https://www.cmegroup.com/tools-information/lookups/advisories/ser/SER-6913.html

Please let us know if you have any additional questions.

Regards,

Mirus Support

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.

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 Big Mike 
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Daytrader999 View Post
Great answer, really...

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...

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.

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 Big Mike 
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@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.

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 Balanar 
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This whole datasheet from CME is confusing. (specially for ppl that have a different mother tongue than English)

A clear structure would be very nice.

Nobody really knows what one has to pay in 2014. The brokers as well I think.

We need to wait for statements from brokers.

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 mattz   is a Vendor
 
 
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Big Mike View Post
@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.

Mike

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

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 Daytrader999 
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Big Mike View Post
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.

Mike

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...

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 Silver Dragon 
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josh View 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.

@josh

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.

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 Big Mike 
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Silver Dragon View Post
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.

HFT of this type is primarily an equities market phenomenon and wouldn't be affected by this CME change in the futures market.

Mike

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 Affliction 
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Big Mike View Post
HFT of this type is primarily an equities market phenomenon and wouldn't be affected by this CME change in the futures market.

Mike


Maybe the fee structure for equities/equity options is going to change now? What a time to do it.

Just get on with it!
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 dnkhoward2 
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I thought the fees were high having traded options for a few years. The lower overall overhead was on of the reasons I switched to futures.

This may be the tipping point for me to switch back to options.

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  #67 (permalink)
 Big Mike 
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Hopefully the CME will release some clarifying statements soon. Right now too many unknowns or things that need to be clarified.

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 dnkhoward2 
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Big Mike View Post
Hopefully the CME will release some clarifying statements soon. Right now too many unknowns or things that need to be clarified.

Mike

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

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 Luger 
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Big Mike View Post
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.

Mike

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.

Luger

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  #70 (permalink)
 Big Mike 
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I am hearing that the CME may reconsider the Corp/LLC automatic professional designation. That is my hope.

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 Fritzk 
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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.

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  #72 (permalink)
 Balanar 
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Fritzk View Post
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.

They have a monopoly and tell me some alternatives?

CME is way to big.

If you are focused on futures, you will have no chance avoiding CME. CME has on almost every product the highest liquidity.

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  #73 (permalink)
 Silver Dragon 
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Big Mike View Post
HFT of this type is primarily an equities market phenomenon and wouldn't be affected by this CME change in the futures market.

Mike

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.

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 DPM Trading 
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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!

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 Robert Carrillo 
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Jura View 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:




Source.

(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.

Hi Jura,

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:


Quoting 
Dear DTN.IQ/IQFeed Customer,

Below you will find information regarding price and service changes to DTN.IQ/IQFeed effective January 1, 2014.

We also received notice from several exchanges regarding fee changes for 2014. Because these changes impact each customer differently, please visit our website Welcome to DTN IQFeed! - Fast, Reliable, Affordable. Market Data and API's. and click on “fees” to view the updated fees.

What is different is that CME Group is raising fees and stopping the waivers program. It's been in the news since Nov 12,

CME Group hikes transaction fees for 2014 | Reuters

and the RCG letter to CME was referenced on Nov 19,

CME Group digs in on fee increases as brokers protest | Reuters.

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

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  #76 (permalink)
 Big Mike 
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Silver Dragon View Post
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

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.

Mike

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 Silver Dragon 
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Big Mike View Post
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.

Mike

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.

Robert

High-Speed Traders Exploit Loophole - WSJ.com


Quoting 
The Chicago Mercantile Exchange, a unit of CME Group Inc., is the largest U.S. futures exchange, handling 12.5 million contracts a day on average in the first quarter, according to Sandler + O'Neill Partners L.P. High-frequency trading generated about 61% of all futures-market volume, up from 47% in 2008, according to Tabb Group.


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  #78 (permalink)
 shodson 
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Balanar View Post
They have a monopoly and tell me some alternatives?

CME is way to big.

If you are focused on futures, you will have no chance avoiding CME. CME has on almost every product the highest liquidity.

The Intercontinental Exchange (ICE), but they don't have the more popular contracts people like to trade on CME, maybe ICE will become more popular.

https://www.theice.com/productguide/Search.shtml?productGuide=&advancedKeyword=&markets=ICE+Futures+U.S.&contractTypes=Futures

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 Big Mike 
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Silver Dragon View Post
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.

Robert

High-Speed Traders Exploit Loophole - WSJ.com

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.

Mike

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 Fritzk 
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Silver Dragon View Post
I am not sure on the algo vs HFT.. to me they are the same.

Some quick links to explain it better than I could.

Algorithmic Trading is Not High Frequency Trading

Risk from High Frequency and Algorithmic Trading Not as Big as Many Think - Seeking Alpha

The difference between automated, algorithmic and high-frequency trading | Ash Booth

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 Fritzk 
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shodson View Post
The Intercontinental Exchange (ICE), but they don't have the more popular contracts people like to trade on CME, maybe ICE will become more popular.

https://www.theice.com/productguide/Search.shtml?productGuide=&advancedKeyword=&markets=ICE+Futures+U.S.&contractTypes=Futures

Thx, I briefly looked at them and the Eurex after I read the OP. I will need more research to be able to come to a conclusion on the viability or not.

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 indiantrader 
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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.

Energy - WBS on ICE is same as CL...ICE has infact better and more liquid energy products than CME like gasoil, brent
https://www.theice.com/productguide/ProductSpec.shtml?specId=213

Fx- ICE fx contracts including crosses and the unique US dollar index contract
https://www.theice.com/forex.jhtml

STIR - NYSE euronext has STIRs including eurodollar, euribor, euroswiss, short sterling
https://www.theice.com/index

Bonds- NYSE has all 5, 10, 30 years bond futures like CME on US treasuries
https://www.theice.com/index

Grains- Both ICE and Euronext have same grain products

Equities - ICE has Russell 1000 and 2000 indices for large caps and small caps.....another option is ETFS...SPY,QQQ,DIA

I don't see a reason for increasing trading costs by CME as the volumes including options volumes are steadily rising as seen on CME website.

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 kevinkdog   is a Vendor
 
 
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indiantrader View Post
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.

Energy - WBS on ICE is same as CL...ICE has infact better and more liquid energy products than CME like gasoil, brent
https://www.theice.com/productguide/ProductSpec.shtml?specId=213

Fx- ICE fx contracts including crosses and the unique US dollar index contract
https://www.theice.com/forex.jhtml

STIR - NYSE euronext has STIRs including eurodollar, euribor, euroswiss, short sterling
https://www.theice.com/index

Bonds- NYSE has all 5, 10, 30 years bond futures like CME on US treasuries
https://www.theice.com/index

Grains- Both ICE and Euronext have same grain products

Equities - ICE has Russell 1000 and 2000 indices for large caps and small caps.....another option is ETFS...SPY,QQQ,DIA

I don't see a reason for increasing trading costs by CME as the volumes including options volumes are steadily rising as seen on CME website.


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.

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  #84 (permalink)
 Big Mike 
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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.

Mike

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  #85 (permalink)
 pedalon 
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I just emailed my account rep at TradeStation. I will post when I receive a response.

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 Fritzk 
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I emailed and phoned Kingsway/Vision Financial and Dorman this morning, still no response.

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  #87 (permalink)
 Obelixtrader 
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I send yesterday email to interactivebrokers still no response

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  #88 (permalink)
 Laurus12 
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Quoting 

Laurus12 View Post
Did a simple e-mail to the CME with the listed e-mail addresses:


Quoting 
Subject: Regarding the 2014 Fee Changes Summary

Dear Sirs or Madams,

No offense intended, but based on the principle "more customers equals more profits" I believe without a doubt that CME Group Inc is going to loose a lot of traders by going forward doing this. I think this will be a "shoot your self in the foot" act.


Best regards,
.....


These are the responses I got from the CME on my e-mail to the two different addresses (marketdata@cmegroup.com and info@cmegroup.com):


CME Market Data Team
....,

Thank you very much for your comments about the new Market Data Fee’s. All concerns are being acknowledged and are much appreciated. Please feel free to contact The Market Data Team with any questions you may have regarding the policy update.

Warmest regards,
The Market Data Team


CME Customer Service
Thank you for contacting CME Group

Dear ....,

We thank you and value your feedback regarding Market Data Fee changes. Your comments have been escalated to the appropriate team for immediate review.

Thank You,
CME Group
Customer Service


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  #89 (permalink)
 Jura 
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Robert Carrillo View Post

(...)

Thank you Robert for your thorough and elaborate response, very much appreciated. It's clear for me now (and I suspect for others to).

All the best with implementing these changes on IQFeed's side,

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  #90 (permalink)
 Big Mike 
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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.

More next week hopefully.

Mike

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  #91 (permalink)
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Balanar View Post
They have a monopoly and tell me some alternatives?

CME is way to big.

If you are focused on futures, you will have no chance avoiding CME. CME has on almost every product the highest liquidity.

Well - Eurex will most certainly benefit.

I may well stop trading ES entirely and stick with FESX.

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  #92 (permalink)
 djoyce854 
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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.

https://www.cmegroup.com/company/files/2014-fee-changes-summary.pdf

Best Regards

Yinan
IB CA"

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  #93 (permalink)
 bob7123 
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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?

Robert Carrillo
There is a $2/mo increase for IQFeed Core Service, from $68/mo to $70/mo

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?

Robert Carrillo
Not new fees, but the waivers will end on Jan 1, 2015

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?)

Robert Carrillo
If they sign up before Mar 1, 2014 (cutoff for new waivers) and obtain waivers, the cost will be the same as yours will be.

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]?

Robert Carrillo
The cutoff for new waivers customers is Mar 1, 2014. If you are switching brokers and still want waivers through 2014, you need to be certain the waivers through [Broker B] are in place before that date. I wouldn’t wait until the last minute on this. Brokers will be slammed with waiver requests as the Mar 1, 2014 cutoff approaches.

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?

Robert Carrillo
This one is important and I haven’t yet posted about it on futures.io (formerly BMT), but will. CME Group charges exchange fees for each instance of providing data, not for how it is displayed. A single IQFeed account can still feed multiple applications simultaneously on the same computer and be charged one set of CME exchange fees.

Brokers will no longer be providing free CME Group data, so if you are also receiving Globex data from a broker, you’ll pay $15/mo to each broker you are receiving that data from. The $15/mo pays for Globex from CBOT, CME, COMEX and NYMEX.

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?

Robert Carrillo
As long as your API app(s) are on the same computer as the other apps you’re using IQFeed with, there are no additional fees.

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?

Robert Carrillo
I think you’ll be pleasantly surprised at the Non-Pro fees for Globex data, but you can receive those quotes on a 10 min delay with IQFeed Core Service. The two exceptions are COMEX and NYMEX which charge $1/mo each for delayed.

Finally, come 2015, how often will I be able to upgrade or downgrade my subscriptions?

Robert Carrillo
You can add exchanges or services whenever you like. Services and most exchanges prorate for the balance of the month. The exchanges that don’t prorate are COMEX, NYMEX and ICE Futures.

You can cancel exchanges and services anytime as well, but they will remain on your account until month-end, since there are no refunds or credit for unused time.

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

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  #94 (permalink)
 Balanar 
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Big Mike View Post

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.

More next week hopefully.

Mike

Why should I pay for my platform? This seems to be illogical. Maybe they mean platform and broker are the same!?

Or what do they mean by platform? My platform is NinjaTrader. I think the CME can not set up a fee for a platform.

Hope they can clarify this BEFORE 1st Januaray, 2014.

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  #95 (permalink)
 Big Mike 
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Balanar View Post
Why should I pay for my platform? This seems to be illogical. Maybe they mean platform and broker are the same!?

Or what do they mean by platform? My platform is NinjaTrader. I think the CME can not set up a fee for a platform.

Hope they can clarify this BEFORE 1st Januaray, 2014.

Read the post you are quoting, the paragraph above what you quoted.


Big Mike View Post
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.


Mike

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  #96 (permalink)
 GFIs1 
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... there are more questions than answers.

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"

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  #97 (permalink)
 Jura 
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GFIs1 View Post
(...)
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
(...)

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).

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  #98 (permalink)
 GFIs1 
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Jura View Post
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.

..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.

GFIs1

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  #99 (permalink)
 Jura 
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GFIs1 View 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?

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  #100 (permalink)
 GFIs1 
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Jura View Post
... 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."*

GFIs1

* Homo economicus - Wikipedia, the free encyclopedia

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