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

  #61 (permalink)
Market Wizard
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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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  #62 (permalink)
Elite Member
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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...

"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
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  #63 (permalink)
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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.

Robert

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  #64 (permalink)
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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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  #65 (permalink)
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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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  #66 (permalink)
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Equities/Options

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)
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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.

Mike

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  #68 (permalink)
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Thanks Big Mike


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

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
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5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
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