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CME Fee changes 2014, significant impact
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CME Fee changes 2014, significant impact

  #101 (permalink)
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Try to understand

So if I try to understand what Bob said is for somebody who got Ninjatrader for platform and a broker it will have only a fee of 15$ /month, + the increase of the other fee correct ?

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  #102 (permalink)
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And the Word from ThinkorSwim...

My email to ToS support this AM:
---------------------------------------

Hello,

I have been reading that the CME is planning to charge more for their data feeds. A lot of people seem to be up in arms, but perhaps some or all of it is not warranted.

See for example: CME Group stands by fee hikes as brokers protest - chicagotribune.com

As a practical matter, are there any plans to charge for data in ToS accounts, and/or reduce the number of symbols that have realtime data, or should we expect things to stay as they are?

Thank you very much.

-Bob

ThinkorSwim Representative
Hello Bob,

Thank you for the e-mail and inquiry. I am not aware of any changes in the near future. Please rest assured that should there be any changes to our fees or data subscriptions, we will inform you as soon as possible.

Please feel free to follow up with any additional questions. Thank you.

I don't trade with any frequency with ToS due to their high commissions. (just IRA, etc.) I guess they are hiding the new fees in those higher commissions.


Separately,

Dervakon View Post
So if I try to understand what Bob said is for somebody who got Ninjatrader for platform and a broker it will have only a fee of 15$ /month, + the increase of the other fee correct ?

Dunno what other brokers are doing. I know my trading is my business, I treated it like that and talked to all of the vendors I do business with who might be affected by the CME changes.

If others want to ask what their brokers are doing in 2014/2015 and share the results here, I think people would find that helpful.

-Bob

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  #103 (permalink)
Market Wizard
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GFIs1 View Post
... ...
GFIs1
who thinks to have understood "THIS CME signal"

I think it is a good time to buy some CME.

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  #104 (permalink)
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bob7123 View Post
Dunno what other brokers are doing. I know my trading is my business, I treated it like that and talked to all of the vendors I do business with who might be affected by the CME changes.

If others want to ask what their brokers are doing in 2014/2015 and share the results here, I think people would find that helpful.

-Bob

I believe most brokers will be clueless about this until after it is implemented, especially at larger firms where individual brokers will get a mass email about it or have it covered in a meeting basically the day it goes live.

You'll only find better service dealing with the IB's and such on futures.io (formerly BMT), because they have to be "better" in order to survive in this industry. This is one way they can be, education of their brokers.

Mike

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  #105 (permalink)
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cory View Post
great, it will drive more people to uncharted frontier... Forex.


josh View Post
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)


GFIs1 View Post
... 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"

I talked to a nice lady at DTN iQ. She told me I had some marginal increases with my feed (68 to 70 for core data), some other very minor increases until 2015. This is acceptable. There is a lot of "up in arms" over this at the moment. In 2015, when the waiver is dropped, the fees may go up significantly, even for Non Pros, especially if you have all exchanges (CME, COMEX, NYMEX, ICE, EUREX). It will just add to to sort of like death by a thousand cuts.

The lady also said, quite clearly, that data providers are talking to CME about the waivers. There may be nothing huge for non-pros at all in 2015. Or it maybe massive. It's too early. We must assume the worst is coming either way.

As a business owner, I looked at my futures commissions in November (CME and Eurex combined) were about 3K/month, which is about normal. Most of that already goes to CME, very little stays with the broker. That's why these brokers are going to be the first to slowly get extinct. I think a lot of smaller traders will have an easier time to adjust and adapt to change. Brokers have buildings, expenses, employees, other costs that smaller traders don't have. Brokers will raise costs, this will be inevitable. Even without CME gouging.

The point I trying to make is, as a business - the ones that survive are not the smartest or the strongest, but the ones most adaptive to change.

After PFG raped me of 1/3rd of my capital a couple of years ago. And I watched the corrupt bureaucrats of SEC, CFTC and NFA dilly dally and posture about returning my money to me (a process still undergoing). I had already vowed to change.

In 2012, I had 10% capital in alternative investments (this meant FX to me). Someone mentioned FX is the Wild West or something as dramatic as that. This is a most uneducated view. Sure you retail bucket shops that will rape and hunt your stops on that 50Dollar 500:1 account you opened. But ther are other options. More secure than the futures industry in the US.

What the futures industry is slowly becoming; is a little lethargic. They think capital cannot move. They are wrong. For example - FX can be traded with a exchange (like LMAX), or with a bank (like Barclays) or with an institutional grade liquidity (like Hotpsot FXI) or with DMA Platforms (like cTrader)

But this is not about FX, its about trying to adapt to change. After the PFG debacle, I had accounts with FuturePath, Vision and AMP. And 99% of my capital was in futures. This has been slowly changing, 6months ago, 40% of my capital was not only not in futures, but also not in North America.

As of yesterday, 90% of my capital is out of NA, into FX (and not in bucket shops either). This was simply a response to changing conditions. The futures industry gets away with sanctioned rape because it can. But capital is not stupid. It goes where its allowed to invest and speculate freely. I cannot believe what restrictions were in place when I tried to open a 6figure FX account in Canada. After 30mins on the phone with a clueless and shuffling incompetent Friedberg Rep (FXCM Canada), I hung up and moved all of it overseas.

Done. respond to change, Adapt or die. If trading is business, learn, evolve.

A small futures account still exists trading ES. Not sure it will remain in place at the end of 2014. My point is, learn to adapt. My beef was not just with CME but with actual regulators of the industry. It adds up, fairly or unfairly, to a shrinking pie for me in futures.

And the FX world, is fast getting far more organised, secure and professional than most retailers ever think. They regurgitate nonsense they read on media and message boards. Never doing any research themselves or generating left field thinking on their own

I still believe the eventual costs with this CME hike, have a good chance of not being as bad as it sounds now, at least, not for the profitable traders. For others, with marginal capital and especially for brokers, this is might be bad news.

GFS1 made a good point that futures may lose some of their liquidity as capital re-allocates to other markets, and that it may have more violence and less depth in the order book, and this may make it harder to trade, but again this is not too bad for those either trying to position trade or swing, but bad news for scalpers.

We must be prepared to adapt. My capital doesn't bother to ask questions. It shoots first and asks questions later. to me, the need to survive and be robust (while trying pare costs) is more important that anything else. So I wont have any data feed from DTN iQ into the New Year, My FuurePath account and Vision account are already closed and a small piece retains with AMP. And if that increases its costs next year (as I suspect it will have to), then that maybe on the chopping block as well.

PS - Even with restrictive Canadian legislation (from bureaucrats who all deserve to be shot), its still not as bad as US individuals not being able to move capital freely overseas, But even then, some you Americans may want to look at managed FX in regulated jurisdictions (if individual accounts are not possible).

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  #106 (permalink)
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The "up in arms" is understandable for some of us like me who are looking at a 25k fee increase next year based on initial data. It looks like this will be lower now, but waiting on CME to get their answers in line.

A $2/month fee increase is not what this is about.

Sent from my LG Optimus G Pro

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  #107 (permalink)
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Big Mike View Post
I believe most brokers will be clueless about this until after it is implemented, especially at larger firms where individual brokers will get a mass email about it or have it covered in a meeting basically the day it goes live.

You'll only find better service dealing with the IB's and such on futures.io (formerly BMT), because they have to be "better" in order to survive in this industry. This is one way they can be, education of their brokers.

Mike

Clearly there is confusion and your bringing this issue to the attention of the futures.io (formerly BMT) members can only help. I and I'm sure others appreciate that.

To give you an update, IQFeed (Robert Carrillo) was unsure about LLC trading. Briefly: "We donít know. It isnít addressed in the CME Group Pro/Non-Pro rules, but we are asking for clarification and will advise ASAP."

I also spoke with Anthony Giacomin at Stage 5 Trading. He too said he was waiting for answers. He added that there is a lot of lobbying going on at this time and they are hoping to get a better outcome.

-Bob

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  #108 (permalink)
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Something I don't understand. I always understood that equity exchanges made a distinction between pro and non-pro for data charges with the latter being much cheaper. Futures exchanges never had that and charged everyone the same (high) rate. Is CME now following the example of the equity exchanges and allowing non-pro traders to get data at a greatly reduced rate while increasing the data fees for pros? Won't most retail traders qualify as non-pro now? What exactly will they pay under the new plan vs. now?

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  #109 (permalink)
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Bookworm View Post
Won't most retail traders qualify as non-pro now? What exactly will they pay under the new plan vs. now?

Bookworm,

I think a significant number of retail traders will be paying Pro fees come Jan 2015. Assuming traders qualify as Non-Pro under the CME Group Pro/Non-Pro rules, the other requirement is that they qualify for the current CME Globex waivers program, and maintain that position into 2015.

Traders who are Non-Pro per the CME Group rules, have Globex waivers by the Mar 1, 2014 cutoff, and hold that position through 2014 will be classified as Non-Pro come Jan 2015 and pay reduced Non-Pro exchange fees. Traders who are Pro per the CME Group rules, have Globex waivers by the Mar 1, 2014 cutoff, and hold that position through 2014, will be classified as Pro come Jan 2015 and pay 50% of the published Pro fees.

To qualify for waivers currently, traders need to have CME Globex data feeding a trade-capable software and have a funded account with a broker supporting that software. Not all brokers participate in the current waivers program, and that may be the case come 2015 for Non-Pro qualification. Participating brokers currently verify funded accounts each month for waivers qualification, and they will do so eff Jan 2015 for Non-Pro status qualification.

This is the best info I have currently.

Robert

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  #110 (permalink)
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Deucalion View Post



But there are other options. More secure than the futures industry in the US.

What the futures industry is slowly becoming; is a little lethargic. They think capital cannot move. They are wrong. For example - FX can be traded with a exchange (like LMAX), or with a bank (like Barclays) or with an institutional grade liquidity (like Hotpsot FXI) or with DMA Platforms (like cTrader)


Hi @Deucalion

Are the other options that are more secure than the futures industry the names you mention in the 2nd paragraph above?

I have often toyed with the idea of exploring the FX offers more thoroughly as it potentially offers better options for someone in my time zone and helps a little bit with risks associated with having funds with an FCM in the US when I am a foreigner.

Like Canada, we have ask to CFD products, but I have steered clear of those as they are mostly market makers and shut you account down or take other steps if you start to beat them on a consistent basis.

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