Discount Futures Brokers 2015
Well, its that time of the year again to check futures broker commission rates for 2015. I do this once a year to make sure that my commissions paid are somewhere near the average. You really need to do this once a year, just to keep track of any newcomers, stay abreast of pricing trends, eliminate any brokers that went out of business, and find out about any juicy gossip about which broker got into trouble.
On January 5th, 2015 I set upon the task of building the yearly database of every futures brokerage that I could find on the internet. The process took a full three days of web scraping. I immediately eliminated any brokers with rotten unprofessional looking websites, disconnected phone numbers on the contact page, contact email addresses that bounced (Zaner Futures-My old broker), commission rates above $6 per side, and most importantly…I scoured the CFTC and NFA for any enforcement actions.
After I built the list, I next contacted each broker and requested a quote for commissions. My request stripped out any regulatory fee’s because regulatory fee’s are constant with every broker. I also made a uniform request with identical variables. I asked for a quote for the Emini SP500, 10 year note futures, crude oil futures, Euro FX futures, corn futures, and gold futures. Why did I select only these 6 markets? Because the exchange fee’s for the related futures contracts are identical. For instance, if you want to trade the 10 year note futures, the exchange fee is going to be $0.61. The exchange fee for the 30 year bond future, the 10 year note future, and 5 year note future, and the 2 year note future ALL have the same exchange fee. Asking for individual fee’s would of been redundant. You may also check and see that the exchange fee’s for corn, soybeans, wheat, soybean oil are identical. Same with FX and energy futures. These 6 market groups are also the most actively traded futures contracts in the world.
Contacting Each Broker And Haggling Over Price
Next I contacted each broker individually and I stated that my quote be based upon an opening balance of $10,000 and that I trade an average of two trades each day. I felt that this would represent the vast majority of my readers and give them the best chance at making sense of the landscape. I did my best to haggle over price. Some wanted higher rates and refused to budge. But some where quite willing to lower price to be more competitive. Yet others simply posted their lowest available price, right on their website and would not budge.
Consolidating The Price And Disclosure
After I felt like I had done my best to haggle with each broker, I then notified each broker that the price quote would be used on a comparison table that would be publicly available on my website. I gave each broker the option of contacting me later, and that I would immediately adjust the price higher or lower. I felt this a fair way to give each broker a chance to compete for new customers.
A Fundamental Unfairness
Some of these brokerages are quite large and have many different representatives within the company. It would be unfair to not disclose that on any given day, you might get lucky and find a hungrier rep than I was able to find. You could get a better price on a whole host of different input variables. I also want to be clear that these quotes are just a snapshot in time. Brokerages can and do change pricing without notice.