Big Mike requested I start a thread on Exchange Memberships, so here it is.
I am seriously thinking about making this investment in my trading business because I believe it will significantly improve my profitability.
Becoming an Exchange Member entitles you to a huge savings IF you are a Successful Hi-Volume Trader. For example, non-member clear and exchange fees on E-mini indexes are $2.28 RT. The fee drops to $.92 for exchange members, a 40% savings. Savings can be higher or lower depending on which instruments are traded.
Exchange Memberships are available for all of the major Exchanges thru either the purchasing or leasing of an Exchange Seat. Most Members prefer to lease an Exchange Seat because they usually average approximately $1,000 / Month per Seat. Also, there are no Volume Quota Restrictions placed on you by either the Exchange or the Clearing Firm, so you can trade comfortably at your own pace. But your final decision should basically hinge on whether it is cost-effective for you or not? If your personal trading performance can exceed the cost of the Seat, then it would be practical. But if your personal trading performance cannot exceed the cost of the Seat, then it would just be an added expense that you don't need. Also, the Exchange requires a Non-Refundable $2,000 application fee which takes up to a month to approve. But they will allow you to lease a Seat immediately while you go thru the application process so you can start receiving your savings immediately.
Any high volume trader will get lower commissions than published commissions for small time traders. But if he had a seat, his commissions would have been even lower; even for a high volume trader. So, yes... you do need a seat for even lower comissions than without.
I don't need to trade 20000 contracts a month or a friend to know that having a seat will always beat not having a seat if you are a high volume trader. Your exchange fees are fixed. When you have a seat, they are lower. The rest of your commissions are brokerage fees. No matter how much discount you get from your broker, you will always pay the fixed fees.
I would be very interested to hear how your friend are able to pay lower exchange fees without having a seat?
I would check the statements again. He probably pays "comission" that is lower - but does NOT include the exchange fees. If the broker lits up all items separately, then he may think he pays lower, but there is the second item with the exchange fees.
Yes, exactly. Commissions are different than exchange fees. Regardless of how contracts you trade, you cannot get lower costs than with a seat. I don't know of a way how you can pay less than the stated fees and would still be very interested in how MetalTrade's friend does that.
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