Active traders in the futures markets may benefit from exchange membership. The CME Group offers several membership types. If you average more than a few contracts daily, it may be worth analyzing the savings associated with joining the exchange.
For more info about seat pricing, the application process, or to get started, contact a broker at Cannon Trading today!
There are different exchanges based on the commodity you’d like to trade. For example, a primary exchange for precious metal futures would be COMEX in Manhattan, or the E-Mini S&P futures, CME in Chicago. As per the CME group website, the cost of membership will be reflected differently based on which exchange and division you select. Depending on your preferred instrument and trading style, joining an exchange may positively impact your trading results. Each situation is unique and should be professionally reviewed. Consult with a Cannon broker for more information!
The E-Mini S&P 500, a generally well-known contract, provides a good example of how to reduce overhead by joining the exchange. At the time of writing, non-members pay $1.33 per contract to execute an E-Mini S&P 500 through CME Globex. A CME member-lessee pays a reduced fee of $0.51 per contract(savings of $0.82.) While a member-owner pays even less at $0.39. The value gained from exchange membership is relative to the style and trade frequency of the operator.
An overlooked benefit of CME Group membership includes product volume discounts. Exchange members meeting the ADV (Average Daily Volume) threshold for traded instruments will see an increased exchange fee discount. The discount scales with volume on a tier-based system. Certain contract restrictions apply.
If you’d like more information about whether or not an exchange membership is right for you, contact one of our brokers at Cannon trading. As a full-service brokerage we specialize in CME Group memberships and individualized trading solutions. We’re looking forward to working with you! Let us know how we can help.