Stocks and Commodities Magazine

CME fees and the effects on retail traders

What will the New CME Data Fees Mean to Retail Traders?

Throughout my decade in the industry, the Chicago Mercantile Exchange (CME Group) has made relentless strides in technology; the organization’s efforts have been incremental in the process of bringing the futures markets to the masses. However, recent actions taken by the CME Group will likely force the commodity industry to take a few steps in the opposite direction. Higher fees for traders, but more notably, nearly crippling costs for brokerage firms and platform vendors, might leave an already struggling industry in dire straits.

Data Fees Charged to Retail Traders (Non-Professional)

Much to the dismay of industry insiders; on March 1st 2014, the CME began to enforce its new data fee policy to any newly opened trading account that qualifies as a “non-professional”.
In its simplest form, a “non-professional” is the average retail trader who participates in the markets in capacities other than as a sole source of income. The fees charged to this group of traders will amount to anywhere from $3 to $15 per month for access to live quotes, charts, and depth of market panels within their trading application. Please note, these fees do not apply to traders that place their orders via a full-service broker or trade desk. They only apply to those that wish to have electronic platform access to live price data. Those “non-professional” traders with open and active trading accounts initiated before March 1st were granted a waiver from any additional data fees until January 2015.

For all intents and purposes, this particular data fee charge being implemented by the CME Group is a mere inconvenience to the brokerage firms and platform vendors that must enforce the policy, and an annoyance to traders that must pay the fee. It likely isn’t a deal breaker for serious traders. However, given the record breaking revenue generated by the CME Group prior to these new fees, it tends to rub people the wrong way and is deterring some casual traders from considering commodities over alternatives such as FOREX and stock ETFs.

Read more about new CME fees when trading commodities in the May 2014 issue of the Stocks & Commodities Magazine.  

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