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Becoming an Exchange Member (Leasing Seat)
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Becoming an Exchange Member (Leasing Seat)

  #11 (permalink)
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MetalTrade View Post
It seems that with higher volume even without a seat you can get lower exchange fees.

That's the whole issue, people think they need a seat but in reality they don't.

I called my brokers and both said that this is not possible to have lower fees as a non member than with. Can you please refer me to a broker or URL that state otherwise? I would like to have some facts other than what you heard from your friend.

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  #12 (permalink)
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I made a math error in the OP. The discount with a lease is 60%, not 40%.

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  #13 (permalink)
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Fat Tails View Post
This is just about fixed and variable costs

If exchange member -> higher fixed cost, lower variable cost

If no exchange member -> higher variable cost, lower fixed cost


At the moment I am happy with my ultra-low fixed cost approach, as it gives me some flexibility.

Or you may put it otherwise: I do not think that my trading volume is big enough to make up for the additional fixed cost.

Specifically, what is your ultra-low fixed cost approach and how does it give you flexibility?

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  #14 (permalink)
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Tundi View Post
Specifically, what is your ultra-low fixed cost approach and how does it give you flexibility?

My fixed cost is less than USD 200,- per month.

Which means that I can easily break-even with a single trade.

Everybody who makes more money than she/he needs to spend is rich.

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  #15 (permalink)
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Fat Tails View Post
My fixed cost is less than USD 200,- per month.

Which means that I can easily break-even with a single trade.

Everybody who makes more money than she/he needs to spend is rich.

Are you speaking of trading costs or your cost of living?

My fixed trading costs on a monthly basis are next to nothing after allocating connectivity charges, depreciation of a custom computer and amortization of a lifetime NT license purchase made 4 years ago.

The only leverage a trader has in reducing costs is in exchange fees and commissions.

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  #16 (permalink)
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Tundi View Post
Are you speaking of trading costs or your cost of living?

My fixed trading costs on a monthly basis are next to nothing after allocating connectivity charges, depreciation of a custom computer and amortization of a lifetime NT license purchase made 4 years ago.

The only leverage a trader has in reducing costs is in exchange fees and commissions.


I am talking about trading costs, of course. I am comparing this to the fixed cost of institutional traders or hedge funds. Having low fixed cost means that you do not have to trade all the time. You may select your trades carefully and stay out of the market, if there is too little or too much volatility.

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  #17 (permalink)
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I've owned memberships on the CME, CBOT, and Mid-America commodity exchanges. The main reason that members kept their seats after we went public and cashed out, was in case they traded electronically. In the past traders purchased or leased memberships, to have access to the trading floor so they could trade in the pits, and to reduce expense by way of discounted exchange fees, clearing fees, and brokerage fees. With the migration to to e-trading the former reason all but ceased to exist, but the latter has not. If there wasn't a member discount, and hence an economic justification for leasing a membership, it would not command any rent. QED. Depending on how much you trade, there IS a point where there is a cost benefit to leasing a membership.

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  #18 (permalink)
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Tundi, certainly not an area I know about, but fwiw, it occurred to me that Don Miller had some postings earlier this year that might be relevant. A quick search on his site led to a few...
Don Miller Trading Journal: Special Post - Final CME Pricing Thoughts
Don Miller Trading Journal: Wednesday Notes - FuturesTV Wrap
Don Miller Trading Journal: Special Post - Comprehensive E-Mini Commission Analysis
If nothing else, you might write him and ask his recommendation. He's mentioned who he uses, but I don't recall the name.

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  #19 (permalink)
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instrument spreadsheet

This should be helpful.

Attached Files
Register to download File Type: xls Exchange_Member_Rates(1).xls (69.5 KB, 39 views)
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  #20 (permalink)
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exchange members and its delegates will always have lower exchange fees and commissions... one can always lower comms as retail to very low levels, yet the exchange fees wont change as long as one remains retail.. once you go pro, some fees drop but others will go higher (market data and news for example) .. but overall, it will be a lower fixed cost of doing business per transaction...

you can buy the seat, depending where you trade... or you can lease it... lease allows you for lower entry point... purchase if you are extremely serious..

there might be reasons why you dont want to buy or lease a seat.. privacy would be one of them...

IMO you want to lower your comms and exchange fees if you are doing scalping or HFT(true HFT) for ticks... if you are position trading and going for longer moves, then $1 wont kill you if you are making $200 per contract per trade.. so it comes down to your trading style..

what follows is a valuable link (to me at least) from advantage where they cover all exchange memberships.. all but eurex...

Resources Membership

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