Futures Brokers and Commissions
Futures Brokers and Commissions
When you open a futures account be sure and ask about the commissions, that’s how these guys make money so I understand the broker has to charge you a commission, I just think they should be honest about it and not try to just get you signed up then see if they can get something extra out of you in the way of fees.
I also understand that there is probably a lot of money to be made by advertising a good rate then just adding on something to get it up to where the broker would like to be charging. And who knows how many customers they would lose if they just told you right up front everything they charge.
With that said you need to be careful and pin them down when it comes to what the broker is going to charge you for all your futures trades including all fees and charges associated with everything.
One of the things they like to do is change the name of the fees or charges then if you don’t specifically ask about that futures charge then they don’t have to tell you.
Here is a list of some of the things that have shown up on my futures account statement:
monthly account fee
quarterly account fee
per ticket charges
minimum order size feescharge for unexecuted orders
charge for cancelled ordersmonthly trading platform fees minimum monthly trading quota charge
inactivity fees
The thing that really pisses me off is when they tell you "we don't charge a monthly fee" then they charge you a quarterly fee.
Or the broker says - we don't have any other fees per trade, but they have a "ticket charge"… Then they tell you sure that's not a fee it's a charge you didn't ask about other "charges" you asked about "fees".
One of the big problems is that very few brokers really know what they actually charge - I have had them try to figure it out and most of them can't do it.
When I open an account I usually ask the broker this question:
If I open an account and deposit 10,000 in my account then buy one contract of corn, the next day I sell that contract for the exact same price I paid for it, then I wait 4 months exactly what will be my account balance.
So far I have never had a broker that has been able to answer this question and get the answer exactly right (to the penny).
Several of them have been very close.
But about half of them will say “well if you do that we are also going to charge you something for...” and they go on to explain some charge or fee that they never told you about.
Probably about half of the brokers just don't know what they really charge for commissions.
Some of them know they just don't want to tell you.
The brokers that charge a $5 commission and a $5 broker fee (not an exchange fee, just an extra broker fee per trade), I know these guy just are not telling you the truth.
Future Brokers and Creative Commissions
- One broker pulled this on me - they reduced my corn commissions to $5.00 but then when I bought a contract of cotton it was $38.00
of course I called and complained and they said we told you $5 for corn, we never said we what we would charge for other futures. They lowered it, but I had to do this for every different contract I traded with them, I only trade about 6 different futures so I had to make 6 phone calls.
- the broker tells you they can't change the commissions on trades you have already placed, so only do one trade and then check your commission, then make them fix it before you do the 2nd trade with them, and tell them you won't be trading any more until you see the correction on your statement.
- they tell you futures commissions are $5.00 , you get your statement and they charge you $12 - you complain, they tell you it's fixed, next statement they charge you $10 - you compalin again, they tell you it's fixed again, next statement they charge you $8.... may take 4, 5 or 6 phone calls to get your commission to what they told you it would be.
(Anyone ever trade with Alaron? I wonder how much extra they make with their low commissions? hmmm?)
Interactive broker is the only one who charged me what they said and their commissions are so low to start they don't have a lot of room to lower them, they do have an inactivity monthly fee but that's about all they charged for extra fees, over all I was very happy with them and never had a problem.
When you open a futures account be sure and ask about the commissions, that’s how these guys make money so I understand the broker has to charge you a commission, I just think they should be honest about it and not try to just get you signed up then see if they can get something extra out of you in the way of fees.
I also understand that there is probably a lot of money to be made by advertising a good rate then just adding on something to get it up to where the broker would like to be charging. And who knows how many customers they would lose if they just told you right up front everything they charge.
With that said you need to be careful and pin them down when it comes to what the broker is going to charge you for all your futures trades including all fees and charges associated with everything.
One of the things they like to do is change the name of the fees or charges then if you don’t specifically ask about that futures charge then they don’t have to tell you.
Here is a list of some of the things that have shown up on my futures account statement:
monthly account fee
quarterly account fee
per ticket charges
minimum order size feescharge for unexecuted orders
charge for cancelled ordersmonthly trading platform fees minimum monthly trading quota charge
inactivity fees
The thing that really pisses me off is when they tell you "we don't charge a monthly fee" then they charge you a quarterly fee.
Or the broker says - we don't have any other fees per trade, but they have a "ticket charge"… Then they tell you sure that's not a fee it's a charge you didn't ask about other "charges" you asked about "fees".
One of the big problems is that very few brokers really know what they actually charge - I have had them try to figure it out and most of them can't do it.
When I open an account I usually ask the broker this question:
If I open an account and deposit 10,000 in my account then buy one contract of corn, the next day I sell that contract for the exact same price I paid for it, then I wait 4 months exactly what will be my account balance.
So far I have never had a broker that has been able to answer this question and get the answer exactly right (to the penny).
Several of them have been very close.
But about half of them will say “well if you do that we are also going to charge you something for...” and they go on to explain some charge or fee that they never told you about.
Probably about half of the brokers just don't know what they really charge for commissions.
Some of them know they just don't want to tell you.
The brokers that charge a $5 commission and a $5 broker fee (not an exchange fee, just an extra broker fee per trade), I know these guy just are not telling you the truth.
Future Brokers and Creative Commissions
- One broker pulled this on me - they reduced my corn commissions to $5.00 but then when I bought a contract of cotton it was $38.00
of course I called and complained and they said we told you $5 for corn, we never said we what we would charge for other futures. They lowered it, but I had to do this for every different contract I traded with them, I only trade about 6 different futures so I had to make 6 phone calls.
- the broker tells you they can't change the commissions on trades you have already placed, so only do one trade and then check your commission, then make them fix it before you do the 2nd trade with them, and tell them you won't be trading any more until you see the correction on your statement.
- they tell you futures commissions are $5.00 , you get your statement and they charge you $12 - you complain, they tell you it's fixed, next statement they charge you $10 - you compalin again, they tell you it's fixed again, next statement they charge you $8.... may take 4, 5 or 6 phone calls to get your commission to what they told you it would be.
(Anyone ever trade with Alaron? I wonder how much extra they make with their low commissions? hmmm?)
Interactive broker is the only one who charged me what they said and their commissions are so low to start they don't have a lot of room to lower them, they do have an inactivity monthly fee but that's about all they charged for extra fees, over all I was very happy with them and never had a problem.
