By Darrell Martin
When you started out trading, one of the first things you probably noticed was the difference you could pay in trading fees. They can depend on the amount of service you are receiving, but sometimes you are paying a huge difference for the same service. Those fees vary widely from brokerage to brokerage.
As you continue trading and increase the amount of trades you place, you probably wish there was a break available for higher volume traders. If you trade futures, you will be happy to know that some exchanges do offer special pricing with membership.
Chicago Mercantile Exchange (CME)
If you do numerous trades per day, you can apply for membership with CME. You can lease or buy a “seat” for discounts on your trading fees. You don’t actually receive a place to sit down or a seat on the trading floor. Have you ever seen a floor trader sitting? It’s figurative. Seats are traded, just like an instrument, with active bid and offer prices. Visit www.cmegroup.com for current pricing. The following details some of the memberships available.
CEIP
There is an Electronic Incentive Program (CEIP) that currently is set to expire December 31, 2015. This program has no monthly fee and you must do a minimum of 25 round turns per day, which is audited quarterly. By signing up for this program, your fees are lowered and the NFA (National Futures Association) fee is not charged. Normally, retail traders pay $2.28/rt in exchange fees and $.02 in NFA fees for an E-mini S&P trade. Some examples of the discounted fees are the E-mini S&P (ES) and the E-mini NASDAQ (NQ) is lowered to $1.29/round turn (rt) which saves you$1.01/rt. The exchange fee for Currency futures is lowered to $1.28/rt for a savings of $2.18/rt.
CME IOM (Index and Option Market) Purchase Seat
As mentioned earlier, seats are bought and sold with current prices shown on CME’s website. For an IOM seat purchase, current prices are around $70,000. (April, 2015) Membership can be sold at anytime at the current market price. There are no minimum trade requirements. Exchange fees vary by the amount of round turn trades done per day as follows: (E-mini S&P futures)
0-75 RTs/day $0.69/rt
75.5-750 RTs/day $0.32/rt
750.5-7500 RTs/day $0.24/rt
7500.5+ RTs/day $0.18/rt
CME IOM Lease Seat
Not quite ready to purchase a seat? As of April 2015, a seat in the IOM Division can be leased for $325 per month, with a three month minimum. There are no minimum trade requirements. Again, using the E-mini S&P futures, the exchange fees are shown below: 0-75 RTs/day $0.92/rt
75.5-750 RTs/day $0.55/rt
750.5-7500 RTs/day $0.47
7500.5+ RTs/day $0.42
High Volume Traders
To summarize the benefits available to high volume traders of CME futures products, you can see from the information presented above that they can take advantage of reduced exchange fees on each trade they make by becoming a CME CEIP member, leasing an IOM seat or buying an IOM Seat. Members do not pay any NFA fees and enjoy reduced exchange fees.
Perhaps you’re not ready for the High Volume trading, but would still appreciate discounted fees. There are some brokerages that offer reduced prices for your trading.
NinjaTrader Brokerage
If you are trading with NinjaTrader Brokerage, their fees vary depending on your license level and what instrument you are trading. An average would be $4.00 Round Turn each trade. If you do one trade, it is $4.00. If you do 100 trades, it would be $400.00. Recently, NinjaTrader announced the addition of forex trading to their services. To read about this, click HERE.
Nadex If you are trading with Nadex, their fees are $0.90 each up to 10 contracts. The fees are then capped at 10, so whether you trade 10 or 100, the fee remains at $9.00 on a single order. For further information, go to www.nadex.com. All of these options are good news and can be beneficial in saving you money whether you do one round turn per day or 10,000 round turns per day! If you would like to further your trading knowledge, go to www.apexinvesting.com where you will find an abundance of free education.
Read more: http://www.benzinga.com/markets/bina…#ixzz3XaxdS8Cx