Wednesday, June 06, 2007

Best Broker for Trading Futures based on Commissions


I made a post earlier that had the wrong calculations, so this is a redo

My trading volume has been increasing trading ER2; over 1k RT for the month of May, and I'm losing money by using my current bundled rate commission setup through Interactive Brokers, so I've done some research to see how I can reduce my trading costs.

Broker Commission Comparison, 1000 Round Trips per month, trading CME index futures-

Interactive Brokers Bundled fee- $4,800
Interactive Brokers Unbundled fee- $4,480

TradeStation standard fee- $4,480
TradeStation Lessee member fee- $4,440 ($3,040 + current IOM lease fee of $1,400=$4,440)

MB Trading fee- $4,500

Velocity Futures standard fee- $4,500 ($3,900 + $500 platform fee for X-Trader Standard)
Velocity Futures Lessee member fee- $4,750 ($4,250 + $500 standard platform fee)

Conclusion- These are the rates I found for 1k RT's per month, obviously the rates for the Lessee's at each firm goes down with the more volume you trade.

If my volume goes up to 2,500 RT/month then who would be best broker?

Interactive Brokers Bundled fee- $11,520
Interactive Brokers Unbundled fee- $9,870

TradeStation standard fee- $9,870
TradeStation Lessee member fee- $7,770 ($6,370 + 1400 lease fee= $7,770)

Velocity Futures Lessee member fee- $7,875 ($7,375 + $500 standard platform fee)

Useful links-
CME membership and Lease info

Conclusion-
If I start to consistently trade over 100 RT a day (2000 RT/month) I will most likely switch to Velocity Futures or another FCM that offers a competitive rate.

Note- This information is for my own use only and may or may not be correct. Also, if anyone has any comments or see's corrections let me know. There are other trading fee's I didn't include for each broker that add to the total costs per month. Also another factor in picking the best broker is the interest given on the money in the account.

2 comments:

bh_prop on 4:55 AM said...

Correct me if I'm wrong, but I think you will find that no futures brokers pay interest on account. You will have to purchase T-Bills to earn any risk free return

Anonymous said...

you are wrong, pay 4-5 % on my six figure future account at ib.

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