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In a message dated 2/24/99 1:54:45 PM Central Standard Time, eadamy@xxxxxxxxxx
writes:
<< Add-on fees seem to be whatever they think they can charge and is a big
source of rip-offs ... big variation from one firm to another, one exchange
to another, and even one customer to another. $2-3 bucks is typical at the
majors, I've heard of some brokers charging fees as high as $9. Personally,
I insist on commission rate which is all inclusive which means no additional
charges.
Earl
>>
I think the original question was about realtime prices, which would be
exchange prices for quotes. They vary from exchange to exchange as Steve
Poser pointed out.
As far as exchange transaction fees, those are pretty straight forward.
However, some firms or traders may confuse these fees because they are listed
together, or because some firms play tricks with the fees.
The CBOT charges an exchange fee of .50 per side for a contract. The CBOTCC
charges a clearing fee of .05 per side for a contract.
Floor brokerage charges can vary from broker to broker. Sometimes brokerages
show a generic floor brokerage charge of $1.50 per side. This may or not
equal in aggregate their real cost. New York tends to be higher than Chicago.
OJ can be $3.75 per side, while the more active T-Bonds are $1.00, for
example. However, some clearing firms might be charging the clients $1.00, or
their IBs or Non-clearing FCMS a $1.00 per side, but actually paying the
broker $.90. Hard to tell the games that some firms are willing to play. I
have always thought there was a class action suit in there somewhere. Hard to
find the smoking gun though.
Also, some FCMs will try to tack on fees to pass along to smaller IBs clients.
They will call them "Ticket Charges" or "Desk Charges" or such. It is just
another way to talk advantage of a smaller IB or its customers by charging
this fee.
I charge my clients the actual fees. At the CBOT, that would be the exchange
fee (.50), the clearing fee (.05), the floor brokerage (1.00 to 1.50
normally), and the NFA (.10), all per side. I only have one client who
insists on paying a inclusive fee, plus NFA. I think by having the actual, it
is the most fair to all the clients and to me, the broker. If someone trades
only bonds, they would pay $1.00 per side, rather than the generic $1.50.
And, if someone is brave enough to trade in New York, they should bear the
cost of that.
I disclose to the clients what the fees are when someone opens an account and
let them take that into consideration when doing the trade. Most veteran
traders though, know the fees already. I will negotiate different rates for
different markets, but this is not really a factor of the fees, but the risk
of the market. An e-mini and an S&P are not equal in risk, so they should have
a different cost.
Regards,
John J. Lothian
Disclosure: Futures trading involves financial risk, lots of it!
Disclosure: John J. Lothian is the President of the Electronic Trading
Division of The Price Futures Group, Inc., an Introducing Broker.
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