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New CME fees on multiple platforms?


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New CME fees on multiple platforms?

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  #1 (permalink)
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Hello, I've been trading for a year, on an OEC platform. I'm aware that starting January I'm going to need to pay a monthly CME fee for my data feed?

I was at the level where I wanted to start experimenting with other solutions to continue training and developing my skillsets, maybe use several platforms in conjunction with for example Sierra Chart and Market Delta Trader... (still doing research on my overall direction).

I just wanted to know if the CME is going to make me pay fees for each platform I use?

Thanks

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SophieM4 View Post
Hello, I've been trading for a year, on an OEC platform. I'm aware that starting January I'm going to need to pay a monthly CME fee for my data feed?

I was at the level where I wanted to start experimenting with other solutions to continue training and developing my skillsets, maybe use several platforms in conjunction with for example Sierra Chart and Market Delta Trader... (still doing research on my overall direction).

I just wanted to know if the CME is going to make me pay fees for each platform I use?

Thanks

Check this thread:



It was discussed in detail last year when the announcement was made.

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SophieM4 View Post
Hello, I've been trading for a year, on an OEC platform. I'm aware that starting January I'm going to need to pay a monthly CME fee for my data feed?

I was at the level where I wanted to start experimenting with other solutions to continue training and developing my skillsets, maybe use several platforms in conjunction with for example Sierra Chart and Market Delta Trader... (still doing research on my overall direction).

I just wanted to know if the CME is going to make me pay fees for each platform I use?

Thanks

To the best of my understanding, you will pay for each additional 3rd party screen.
So to answer your questions, yes!

Matt

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  #5 (permalink)
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That's a disappointment. I wish our country reinforced antitrust rules, particularly in this case where CME owns all major US Futures exchanges...

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  #6 (permalink)
 
 
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SophieM4 View Post
That's a disappointment. I wish our country reinforced antitrust rules, particularly in this case where CME owns all major US Futures exchanges...


Data distribution it not free.
Data is disseminated via pipes and the more are connected to it the more it costs.
Cost of technology went up, so customers, brokers and other professionals are being affected by this.

Matt

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mattz View Post
Data is disseminated via pipes

and a series of tubes?





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SophieM4 View Post
That's a disappointment. I wish our country reinforced antitrust rules, particularly in this case where CME owns all major US Futures exchanges...

You could take your business elsewhere, ie EUREX.

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Big Mike View Post
You could take your business elsewhere, ie EUREX.

Mike

Alternatively, Ice Canada, Canola Contract. Just north of the border.

M

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mattz View Post
To the best of my understanding, you will pay for each additional 3rd party screen.
So to answer your questions, yes!

Matt

I'm not sure that's actually the case. Referencing the thread that @Big Mike already linked...



SMCJB View Post
Bryan T. Durkin
Chief Operating Officer

June 6, 2014

In November 2013, CME Group announced that the company would discontinue the waiver for its market data fees on trading terminals. We listened to your feedback, and understand that in today’s marketplace there can be a need for a single user to access multiple screens for market data. To prevent customers from paying multiple fees for a single user, we will offer “netting,” or a pay-per-user model across our membership base. This will be available to individual members, employees of member firms and Introducing Brokers who receive data from their clearing member firm.

Members who choose to participate must contract directly with CME Group and will need to provide specific details around market data use. This program will begin in 2015.

We will be providing additional information in the coming weeks on the enrollment process. If you have any immediate questions, please contact the market data team at marketdata@cmegroup.com or at 312.634.8395.

Bryan T. Durkin




SMCJB View Post
Member Netting Program

As a follow up to the market data memo dated June 6, 2014 from Bryan Durkin, Members who wish to participate in the netting program should now visit the “Members” tab at https://www.cmegroup.com/data-for-members for detailed instructions on the enrollment process. Any member choosing to participate will need to execute the appropriate agreement(s) and register with the market data team.

For questions related to the netting program, please visit https://www.cmegroup.com/data-for-members and/or contact

CME Americas Market Data Team at marketdata@cmegroup.com or 312-634-8395
CME EMEA Market Data Team at marketdataEMEA@cmegroup.com or +44 (0) 203-379-3856


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SMCJB View Post
I'm not sure that's actually the case. Referencing the thread that @Big Mike already linked...






"This will be available to individual members, employees of member firms and Introducing Brokers who receive data from their clearing member firm."

This does not reference customers of introducing brokers or FCMs.

Matt

Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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It should be noted that the public is tired of taxes and fees and charges just to be a member or participating customer, in addition to their individual high and very expensive cost of doing business with these CME Emini products.

No customer has any hearing ear from any quarter over their costs of:
1) their higher speed internet services
2) their personal office space investment
3) their personal investment in state of the art computer equipment, both multiple monitor systems and advanced computer gamer rigs capable of handling the demands that trading applications require
4) their dedicated office space, heating, lighting and extra high electricity demands upon their residences or commercial office spaces
5) their commission structures, which do not adjust based on volumes, similar to CME exchange members do
6) their non-interest bearing margin accounts of which they have no reduced or blended rate adjustments as similar CME exchange members do
7) their investments in education, memberships, participation forums, textbook, webinars and other publication subscriptions expenses

all of these hidden costs just to be capable of trading these CME products, and now insult to injury, even more fees, whether monthly usage for low volume months, or monthly per screen usage fees (proposed or any variant thereof)

all of these insults and yet they keep sticking more pins into the pin cushions hoping that even more cash will come out...

any you wonder why more and more are shifting over to Equity, Index, ETF and Futures Options trading and away from CME Emini futures, or simply going all the way over to full time Fx Currency pairs trading....

a strong word of caution is in order from those whom would otherwise not be so vocal is in order....

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kronie View Post
any you wonder why more and more are shifting over to Equity, Index, ETF and Futures Options trading and away from CME Emini futures, or simply going all the way over to full time Fx Currency pairs trading....

Clearly you have the right to choose what asset class you wish to trade but consider that stocks require 25K for day trading, stock you need to pay interest if you are short (borrowing costs), Index has no leverage, and FX cash could at times have larger spreads during news announcements with some dealers as oppose to CME where spreads are more stable from my observation.

To me it seems that there is more interest today worldwide than any other time especially in CME products.
CME Group Announces Open Interest Record for FX Futures and Options - CME Investor Relations

Matt

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  #14 (permalink)
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mattz View Post
Data distribution it not free.
Data is disseminated via pipes and the more are connected to it the more it costs.
Cost of technology went up, so customers, brokers and other professionals are being affected by this.

Matt

Come on Matt...they are doing it because they are greedy and have little if no competition. When interest rate volume cranks up again do u think they will eliminate or drop the platform fee because of their increased revenue? I doubt it. The leaders of the CME will stuff their pockets first before they help out the retail trader.

This decision is based on greed and little to do with passing on cost. It is about their compensation and shareholders and with no completion the customer is really not much of a consideration.

I have been a member of. CBOt for 20 plus yrs...

The Market is Smarter than You Are
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tflanner View Post
Come on Matt...they are doing it because they are greedy and have little if no competition. When interest rate volume cranks up again do u think they will eliminate or drop the platform fee because of their increased revenue? I doubt it. The leaders of the CME will stuff their pockets first before they help out the retail trader.

This decision is based on greed and little to do with passing on cost. It is about their compensation and shareholders and with no completion the customer is really not much of a consideration.

I have been a member of. CBOt for 20 plus yrs...

the customer is not part of the equation because of arrogance of greed... The often quoted excuse of having their shareholders interests in mind and having to answer only to them is trotted out and used but really has nothing to do with the idea that, that customer segment (the sophisticated public that uses those services and products CME offers for trading revenue or hopes of profit) has no representation and ends up bearing the brunt of the expenses. @Matt and others fail to realize that those data pipes or networks / servers are and have been paid for going into future replacements of the present infrastructure, and none of these fees represent present costs or expenses.

ever wonder why a toll road, still collects tolls, long after the road and a healthy budget for maintenance and repairs have already been funded?


its a business model that is discussed and studied in B- School, time and time again. The discussion also veers into the Public Policy arena that future public servants study in similar classes, and that discussion morphs into why you never propose to eliminate an existing tax long after its purpose has been accomplished, even if it predates your administration or even lifetime, you simply leave it in place.

@Optimus in their quote of volumes being at all time highs, really I have no idea what those statemens are supposed to suggest or mean.

Customers are fluid, and base their participation in and use of those CME products based on expenses. Proprietary Equity trading desks were all the rage until their expenses rose beyond a normal persons liklihood of profitability, as well as the nasty matter of Prime Brokerage services rolling up and eventually being something that the full faith and credit of the US Treasury had to bail out, irrespective of which major institution the originating Omnibus accounts came from. Those events along with the advent and preference of the basket trades and ETF's took precedence over individualized stock trading spelled the end of their rosey future, although it still took time before more and more Prop Shops (as they were called) to fold; they folded nonetheless.

Emini futures trading is following the same arrogant path, so well trodden by previous vehicles, or as someone said: "asset classes", have gone down.

shame they don't teach reality lessons in B-School, just perpetuality and blue sky lessons, as if: "life is a box of chocolates...", and you know which wise man said that...

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I personally think it is a dumb fee. I would like to think it will go to improve technology and benefit us all but I have my doubts that it will. But $15 monthly if you are not a pro is a tick and half 1 contract on most markets. Just not enough to be concerned about. Pro designation gets materially more expensive but even then most with pro designation probably trade more than 1 contract so should be absorbed easily(if profitable). I am not for the fee but has no real effect on my bottom line so can live with it.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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liquidcci View Post
I personally think it is a dumb fee. I would like to think it will go to improve technology and benefit us all but I have my doubts that it will. But $15 monthly if you are not a pro is a tick and half 1 contract on most markets. Just not enough to be concerned about. Pro designation gets materially more expensive but even then most with pro designation probably trade more than 1 contract so should be absorbed easily(if profitable). I am not for the fee but has no real effect on my bottom line so can live with it.


tick bytes

what you just described are skimming a few sheets off the ream of paper.

somehow they knew that so many would respond, in a similar manner as you described. what remains troublesome is the notion that "they" can disrespect the very same unexpected customer base, which has contributes so handily to their unexpected volume increases and profitability equation.

Commodity products are crafted, designed and proposed in such a manner as to attrack "risk attention or participation of those on the other side of the trade", in exchange for possibly outsized profitability chances. Commodity products are really for the Hedgers, not the Speculators. When the participation from the Spec crowd rises to the levels and exceeds the levels of the Hedgers, then that outcome, as unexpected as it remains, represents pure profit. Sacking that profitability with fees is pure greed magnified by arrogance and more greed. Messing with the equation of attracting participants to these products and changing their profit profile completely upsets "their" basis for participating.

Wise merchants do not byte (bite) the hands that feed them, stupid merchants do. Another more easily understood proverb goes like this: don't look a gift horse in the mouth, you might find his cavities and loose interest.

These fees upon fees and yet again, insult to injury upon those who must maintain multiple platforms / monitors, now having even more fees simply causes the customer to re-evaluate their risk profile and profit potential and seek better opportunities elsewheres.

logical and simple conclusion....

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  #18 (permalink)
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If a $15 monthly fee is materially affecting ones profitability then one should rethink trading futures. Just saying....

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Seahn View Post
If a $15 monthly fee is materially affecting ones profitability then one should rethink trading futures. Just saying....

$340/month for professionals. That's $4080/year and isn't insignificant.
That also assumes your only paying the fee once and not multiple times for multiple accounts/systems/devices.

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kronie View Post
tick bytes

what you just described are skimming a few sheets off the ream of paper.

somehow they knew that so many would respond, in a similar manner as you described. what remains troublesome is the notion that "they" can disrespect the very same unexpected customer base, which has contributes so handily to their unexpected volume increases and profitability equation.

Commodity products are crafted, designed and proposed in such a manner as to attrack "risk attention or participation of those on the other side of the trade", in exchange for possibly outsized profitability chances. Commodity products are really for the Hedgers, not the Speculators. When the participation from the Spec crowd rises to the levels and exceeds the levels of the Hedgers, then that outcome, as unexpected as it remains, represents pure profit. Sacking that profitability with fees is pure greed magnified by arrogance and more greed. Messing with the equation of attracting participants to these products and changing their profit profile completely upsets "their" basis for participating.

Wise merchants do not byte (bite) the hands that feed them, stupid merchants do. Another more easily understood proverb goes like this: don't look a gift horse in the mouth, you might find his cavities and loose interest.

These fees upon fees and yet again, insult to injury upon those who must maintain multiple platforms / monitors, now having even more fees simply causes the customer to re-evaluate their risk profile and profit potential and seek better opportunities elsewheres.

logical and simple conclusion....


I hear what you are saying. But even with multiple platforms the fees are small. Just a blip on my monthly statement so it is an immaterial cost in the scope of trading if profitable. If not profitable it won't be the $15 fee that takes someone out of the business. Yes they are essentially skimming but does not matter much.

"The day I became a winning trader was the day it became boring. Daily losses no longer bother me and daily wins no longer excited me. Took years of pain and busting a few accounts before finally got my mind right. I survived the darkness within and now just chillax and let my black box do the work."
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Seahn View Post
If a $15 monthly fee is materially affecting ones profitability then one should rethink trading futures. Just saying....

tick bytes, smaller than mosquito bytes is what they are...

what is disturbing, as so eloquently outlined above, are the pattern and what it portends...

there are already a number of rooms, where traders are matching with so much less stress (both computerized system stress as well as emotional stress), trading actively in their options accounts, and putting to shame, the Emini futures traders...

simply put, when one factors into that equation, that reality, then what I have outlined above takes on a significant competitive quotient, whereas, someone correctly stated earlier, that the CME is doing these "fee adverse actions", because they don't feel they have any competition....

CBOE used to be the latest and greatest, and trumped Equity trading, until the CME downsized their full contracts into mini-sized futures and then further went from pit to electronic based, and they rose. Guess what, perhaps the CBOE and others have learned and are beginning to address this very same "expense equation" and target those same sophissticated trading public with their substantially lower cost-to-carry products..

the game is afoot...

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tflanner View Post
I have been a member of. CBOt for 20 plus yrs...

Then you know what a long way we have come in technology, execution, and service.
When I started as a commodity broker in the 90's most could not afford internet,
let alone a quote machine . Today, you have streaming machines with quotes, low latency execution, and the ability to
collocate near the exchange.

The cost of the net went down, and with that you have consistent new interest of traders who may sit on the infrastructure for years before placing one trade if at all. So the CME says, choose your battles (Platform and broker) and don't be all over the place. After all, you can just choose one exchange and one platform pay only $5.

BTW, I am more affected by anyone on this because we will be considered as professional.
Our rates will be X5 as much per exchange, per platform, etc
$85 per exchange as far as I know.

I am not a CME advocate, shareholder or in anyway shape of form get any of the fees they charge.
The key for traders is to focus now, and see how to restructure in lieu of these changes and not
go on and on how unfair. This is the approach I decided to take.

I wish you all a good weekend.

matt

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  #23 (permalink)
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sometimes making a point and giving aire to the opposite view is a time consuming but worthwhile effort,

these forums are the place for such enlighten discussions, and hopefully will become part of the response to places like those decision influencers (not decision makers) of these committees, whom feel out of touch and not likely to be reached in committee....


obviously to a trader, whether profitable or not, if complaint over $15 monthly fees are the sole decision making factor, then perhap a larger discussion is in order....

some of us have become ECN members of the CME and/or other exchanges based on the advantages that those membership levels provide....

some of us sophisticated retail traders still have platinum dreams on pauper salaries or how did Lifestyles of the Rich and Famous announcer used to say: "champagne dreams....", simply put, we never forget out meager beginnings, irrespective of where we are at presently....

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mattz View Post
Then you know what a long way we have come in technology, execution, and service.
When I started as a commodity broker in the 90's most could not afford internet,
let alone a quote machine . Today, you have streaming machines with quotes, low latency execution, and the ability to
collocate near the exchange.

The cost of the net went down, and with that you have consistent new interest of traders who may sit on the infrastructure for years before placing one trade if at all. So the CME says, choose your battles (Platform and broker) and don't be all over the place. After all, you can just choose one exchange and one platform pay only $5.

BTW, I am more affected by anyone on this because we will be considered as professional.
Our rates will be X5 as much per exchange, per platform, etc
$85 per exchange as far as I know.

I am not a CME advocate, shareholder or in anyway shape of form get any of the fees they charge.
The key for traders is to focus now, and see how to restructure in lieu of these changes and not
go on and on how unfair. This is the approach I decided to take.

I wish you all a good weekend.

matt

Matt-

I worked for JPM on the floor and been trading electronically since 2001. I don't need a history lesson. Just want to see the CME treat retail traders fairly. They have turned into a bunch of Fat Cats....

I made my money in this business...I just know that there are a lot of people they are affecting that are struggling to make it in this business. I don't like to see the little guy squeezed. I was raised in a big family and the wrong side of the tracks....I have a little empathy..... The CME makes plenty of enough money off of retail traders already.

Have a good weekend and please realize that I know that this discussion was a complete waste of my time.

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mattz View Post
BTW, I am more affected by anyone on this because we will be considered as professional.
Our rates will be X5 as much per exchange, per platform, etc
$85 per exchange as far as I know.

matt

Does this mean that as a professional and you use Ninjatrader with a Rithmic data feed and also use R/Trader as a trading interface you will be charged for 2 professional data fees?
(i.e. $85 for the Ninjatrader login and $85 for the Rithmic login <one exchange pro fee>)

That could get very expensive for the you with multiple exchanges and multiple platforms connecting to the data providers.

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I trade multiple accounts for friends and family.

I have recently been told that anyone trading multiple accounts via a POA (power of attorney) will be classified as a professional by the CME even though they are a non-pro.

One way I think I can avoid that classification is to trade multiple accounts without the broker POA and broker based block account.

The problem is, to do that I will need to use either R/Trader, CQG Trader, or Ninjatraders Group Account function.
The NT Group accounts have some serious draw backs.
(manually managed stops and targets for each account).

If the CME is going to charge data fees for each login, then that automatically doubles the cost even to if you have a non-pro status and non-pro data fees if I use anything other than NT Account Groups.

If I understand correctly NT8 will have very few (if any) changes to the Account Groups.
(Perhaps it is time for someone to create a C# interface to increase the functionality of the NT Account Groups.)

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DavidHP View Post
Does this mean that as a professional and you use Ninjatrader with a Rithmic data feed and also use R/Trader as a trading interface you will be charged for 2 professional data fees?
(i.e. $85 for the Ninjatrader login and $85 for the Rithmic login <one exchange pro fee>)

That could get very expensive for the you with multiple exchanges and multiple platforms connecting to the data providers.

Since you are not a member, firm-memeber of work for a member FCM or IB, I do believe that you will be charged for 2 screens. Find out via your FCM/IB (where you trade the block account) your full cost.
Matt

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tflanner View Post
Matt-

I worked for JPM on the floor and been trading electronically since 2001. I don't need a history lesson. Just want to see the CME treat retail traders fairly. They have turned into a bunch of Fat Cats....

I made my money in this business...I just know that there are a lot of people they are affecting that are struggling to make it in this business. I don't like to see the little guy squeezed. I was raised in a big family and the wrong side of the tracks....I have a little empathy..... The CME makes plenty of enough money off of retail traders already.

Have a good weekend and please realize that I know that this discussion was a complete waste of my time.

@SophieM4 ....
@tflanner...

Instead of just clicking on the "thank you button", I thought to both tank you(s) in written form, and encourage you to contribute more, and never feel such is not worth our time....

we all benefit, and your comment, proved my point, although it took a few moves on the chess board to accomplish...

the publically traded exchanges have the ability to launch bonds easier than before going publically traded, so any budgetary or long term financing issues would be addressed. I remember learning how IBM taught that lesson to the business community by launching 100 year bonds at some of the most attractive interest rates imagineable. The exchanges not only generate tons of positive cash flow, they also sell services (co-location and other priority services), as well as training sessions, books and exclusive access to their facilities (whether on tours, books or multi-media formats). They create money well beyond their core products, such that they could offer rebates to active customer accounts as a way of encouraging growth amongst those sophisticated retail trading public, instead of finding a way to chase away both active and inactive account holders and consumers of their live data feeds...

just a thought....

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One way I think I can avoid that classification is to trade multiple accounts without the broker POA and broker based block account.

I would discourage you from engaging in activity that is not truthful. If you trade other people's account the responsibility is both on you and the party being traded to report it as such.
I would encourage you possibly to discuss this with the FCM, CME, etc how some of this cost could be absorbed by those who's account is being traded. I am not sure it is possible, however, it is worth while finding out.

Matt

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I would discourage you from engaging in activity that is not truthful. If you trade other people's account the responsibility is both on you and the party being traded to report it as such.
I would encourage you possibly to discuss this with the FCM, CME, etc how some of this cost could be absorbed by those who's account is being traded. I am not sure it is possible, however, it is worth while finding out.

Matt

Thanks for the reply.
However, this is not being untruthful.
Unless something has changed, the regulations allow non-professional traders to trade up to 15 'friends and family' accounts without being classified as a professional.

According to all of the SEC and Commodities Futures Trading Commission regulations I have read, I do not meet the requirements of a Securities Professional. It seems as if the Exchange is attempting to create a rate structure that is not supported by the regulating commissions requirements.

I am not suggesting doing anything illegal.
What seems to be happening is the CME is using the brokers to implement the fee on their clients.
Each login is considered another data charge.
If using RTrader and Ninjatrader together created a significant change in a single users data usage I could understand the need to charge a fee. But we all know the difference in data usage for one account or two into the same broker is almost not measurable.

If I have mis-read this information, I'm sure you will set the record straight, but you ARE a professional.

BTW thanks for the great support you have given me as an Optimus client

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Thanks for the reply.
However, this is not being untruthful.
Unless something has changed, the regulations allow non-professional traders to trade up to 15 'friends and family' accounts without being classified as a professional.

Yes, but on these 15 accounts you must have a POA.

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Instead of just clicking on the "thank you button", I thought to both tank you(s) in written form, and encourage you to contribute more, and never feel such is not worth our time....

we all benefit, and your comment, proved my point, although it took a few moves on the chess board to accomplish...

the publically traded exchanges have the ability to launch bonds easier than before going publically traded, so any budgetary or long term financing issues would be addressed. I remember learning how IBM taught that lesson to the business community by launching 100 year bonds at some of the most attractive interest rates imagineable. The exchanges not only generate tons of positive cash flow, they also sell services (co-location and other priority services), as well as training sessions, books and exclusive access to their facilities (whether on tours, books or multi-media formats). They create money well beyond their core products, such that they could offer rebates to active customer accounts as a way of encouraging growth amongst those sophisticated retail trading public, instead of finding a way to chase away both active and inactive account holders and consumers of their live data feeds...

just a thought....

Thank you for this post and I happy to hear that my added perspective is of value.
Above all, I don't want to give the impression that I don't care about cost, and the little guy, because this is not what I stand for. But, the only argument that I hear is that the exchanges are greedy, they make enough money, etc This is not a valid economic argument in my eyes.

Let's address things that pertain to us:
1) The cost of technology and data distribution
2) The traders who simply do not trade. They engage in research, programming, analysis, etc
I personally believe that between FCMs, IBs, etc there are tens of thousand of these. I cant imagine that this data distribution is just free and expected to get free forever while such users exist.

CME does offer individual and corporate memberships. Here is a balancing act where the CME is trying to help those who trade and add liquidity. You can have your CME fees lowered if you do sufficient volume.
We are actually helping customers with such applications nowadays, and in my opinion they are reasonable as far as cost.

This is a hot topic, and I do appreciate the different perspectives here. I agree that such discussions could be useful, because I see the retail perspective, and I hope you guys see new perspectives you did not consider before.

Let me end this on a good note, and say that I will do my best to address such things when I do talk to the CME.
If I believe that circumstances require a further consideration, I will point it out.
Whether I will have influence is a different story, but I will try my best.
If anything just to say to myself that I tried for you guys.

Matt

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mattz View Post
Let's address things that pertain to us:
1) The cost of technology and data distribution
2) The traders who simply do not trade. They engage in research, programming, analysis, etc
I personally believe that between FCMs, IBs, etc there are tens of thousand of these. I cant imagine that this data distribution is just free and expected to get free forever while such users exist.

There's a difference in the cost of the data ditribution by the CME, and the cost of the distribution by the intermediaries. CME obviously has a cost of data distribution and I believe that CME can and do charge anybody who connects to them for such data. If you and other brokers decide to pass on that fee, that is your choice. What CME is doing here though is charging a licensing fee for anybody who sees that data whether they (the CME) have a cost of providing it to them or not.

mattz View Post
CME does offer individual and corporate memberships. Here is a balancing act where the CME is trying to help those who trade and add liquidity. You can have your CME fees lowered if you do sufficient volume. We are actually helping customers with such applications nowadays, and in my opinion they are reasonable as far as cost.

The one thing to be careful of with individual exchange membership is that under IRS Section 1402(i) it can make traders subject to self employment tax on their trading earnings. Depending on your tax situation this could be significant or insignificant. I'm not an accountant though so would advise others to consult with their accountant.

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If you and other brokers decide to pass on that fee, that is your choice.

I am not sure about the mechanics of this, but we cant absorb such costs.

Matt

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There's a difference in the cost of the data ditribution by the CME, and the cost of the distribution by the intermediaries. CME obviously has a cost of data distribution and I believe that CME can and do charge anybody who connects to them for such data. If you and other brokers decide to pass on that fee, that is your choice. What CME is doing here though is charging a licensing fee for anybody who sees that data whether they (the CME) have a cost of providing it to them or not.
The one thing to be careful of with individual exchange membership is that under IRS Section 1402(i) it can make traders subject to self employment tax on their trading earnings. Depending on your tax situation this could be significant or insignificant. I'm not an accountant though so would advise others to consult with their accountant.

Even for an individual Futures trading profits are taxed as hybrid rate of capital gains / income. It is a 60/40 split that creates a 28% blended tax rate. So it doesn't matter whether the CME classifies you, the IRS already has a system to tax it.

Again, talk to an accountant to be sure.

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SMCJB View Post
There's a difference in the cost of the data ditribution by the CME, and the cost of the distribution by the intermediaries. CME obviously has a cost of data distribution and I believe that CME can and do charge anybody who connects to them for such data. If you and other brokers decide to pass on that fee, that is your choice. What CME is doing here though is charging a licensing fee for anybody who sees that data whether they (the CME) have a cost of providing it to them or not.


mattz View Post
I am not sure about the mechanics of this, but we cant absorb such costs.
Matt

Sorry Matt I should have made my point clearer. I wasn't in anyway implying that clearers should absorb these new data fees. My point was that you can't argue that data distribution has a cost and this is just that cost being passed on.

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SMCJB View Post
CME obviously has a cost of data distribution and I believe that CME can and do charge anybody who connects to them for such data. If you and other brokers decide to pass on that fee, that is your choice.


SMCJB View Post
Sorry Matt I should have made my point clearer. I wasn't in anyway implying that clearers should absorb these new data fees. My point was that you can't argue that data distribution has a cost and this is just that cost being passed on.

To be clear, the gateway provider is the licensed distributor and this is not necessarily/usually the same party as the clearing firm/IB.

In @mattz's defense, it's unusual for the distributor, nor the clearing firm/IB, to bear the license/distribution/user fees. In fact, it is usually passed on with a middleman's margin.

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Yes, but on these 15 accounts you must have a POA.

@mattz do you know if the CME rule changes affect on all brokers?

i.e. I was told that anyone trading more than two accounts via a POA will be considered a professional?

(I've been told by some brokers that they have not heard of the change and it has not affected their traders)

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@mattz do you know if the CME rule changes affect on all brokers?

i.e. I was told that anyone trading more than two accounts via a POA will be considered a professional?

(I've been told by some brokers that they have not heard of the change and it has not affected their traders)

In our industry "brokers" have different level of experience and access to information.
As far as I know, you would be considered a professional if you have a POA unless it is a spouse.
BUT, why not reach out to the CME Market Data support? https://www.cmegroup.com/market-data/
Gather all your questions, and talk to these guys. They are the ones who make the rules and enforce them.

Matt

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