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Robert H

New Broker Announcement: CME Group

Robert H

Guys, thanks for all the useful information posted here about CME Group. Just a favor, we beg you not to post verbatim CMEG emails, just share their relevant communications in your own words. While we can discuss whether disclaimers in email signatures are legally meaningless or legally binding, we at BBT want to be respectful of those disclaimers.

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One thing I don't get is, using Andrew's code, 2.95 up to 1000 shares... That's what is advertised on their site; so what's the discount? I'm all for helping Andrew if he gets a kickback, but is there anything obvious I'm missing?

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OK yes I see now. For getting that commission you need to be an active trader, meaning trade at least 750,000 shares a month. Which most of the retail traders will not be in that range.

 

Thanks for checking anyways!

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Response I got from them

 

The Bearbull-CMEG promotion allows active traders to trade without a minimum monthly volume and offers discounted commission. The Active Pricing Plan, as seen on CMEG website, is designed for Active Traders who maintain a volume of 750,000 per month and offers a commission of $2.95 on trades up to 1000 shares and $0.007 per share on trades over 1000 shares.

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Tech_Tarzan, please email them directly and mention you want the Bear Bull Traders promotion. The rep should be able to assist. brokerage@cmelitegroup.com

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Hi All,

 

Just a little FYI, if you call CMEG be prepared to be charged for international calling...at least my cell phone was charged per minute. I had some unnecessary lengthy conversations with CMEG over the phone that I should of left for emails..so I got charged at $1.99 per minute.

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Hi All,

 

Just wanted to share my latest suggestions/responses to CMEG on some of their margin policy changes. They preformed an update the previous night which clients were not made aware of and it affected my trading that morning (Thursday 3/29) (you all probably heard me screaming in the chat).

 

Also if anyone can assist with explaining what those bullet points mean in layman's terms (looking at Rob H and Ryan W for that one) I would appreciate it, especially the first and last bullet. I am not sure if this is changing their Leverage Schedule... (the 6:1 margin for accounts greater than 2500 and 4:1 for accounts smaller than 2500 down to 500) but it sounds like it is due to the maintenance requirements.

 

Their response:

 

CMEG Risk Management Team has been working on their risk parameters and ensuring that all accounts are held in accordance with their Margin Policy. Overnight a system wide update was done on all of their platforms. They included the margin rules in their response and they can also be found in the Resource Section in the Account Management Portal and on their website.

 

The message I received relates directly to the fourth rule, since the stock price was between $5.01 and $16.67, there was a maintenance requirement of $5 per share. Based on this I would be allowed to short just around 700 shares.

 

1. A 16% maintenance requirement for stocks that are priced at more than $4 per share.

2. A maintenance requirement of $2 per share applies to marginable stock valued from $2 to $4 per share.

3. A maintenance requirement of 100% is needed for all long stocks trading at $2 and below.

4. A maintenance requirement of $5 per share applies to marginable stock valued from $5.01 to $16.67 per share that are sold short.

5. A maintenance requirement of 100% is needed for all short stocks trading from $2.50 to $5 per share.

6. A maintenance requirement of $2.50 per share is needed for all short stocks trading below $2.50 per share.

7. A 40% maintenance requirement may be needed if a position represents 70% - 100% of the total marginable long value and short value.

 

CMEG Margin Policy aims to manage and control risk exposure to accounts that are set up for margin trading.

 

My response:

 

Thank you for providing me with the the update from CMEG margin policy requirements. However, I do wish when future updates to the platforms are being implemented that an email to all clients is sent prior to the update. I planned out my approach that morning pre-market and because I was unaware of this update (which dramatically changed my strategies and approaches for trading that day) I missed out on several opportunities at market open and was in a frazzle not knowing whether there was something wrong on my end, my hotkeys, account, BP, or what was actually going on. I also could not connect to anyone via phone that morning when I called to find out what was happened. This was the 2nd time this month that updates were implemented without clients being made aware.

 

I did appreciate your email with the above information and understand these growing pains but I strongly feel clients should be made aware of any changes prior to them being implemented. Perhaps an internal message from the platform or email, etc.

 

*Also can you please further elaborate with examples and layman's terms descriptions for each of these requirements. I am not clear on them (especially the ones in yellow). This seems to change the Leverage Schedule that CMEG offers.

 

• A 16% maintenance requirement for stocks that are priced at more than $4 per share.

• A maintenance requirement of $2 per share applies to marginable stock valued from $2 to $4 per share.

• A maintenance requirement of 100% is needed for all long stocks trading at $2 and below.

• A maintenance requirement of $5 per share applies to marginable stock valued from $5.01 to $16.67 per share that are sold short.

• A maintenance requirement of 100% is needed for all short stocks trading from $2.50 to $5 per share.

• A maintenance requirement of $2.50 per share is needed for all short stocks trading below $2.50 per share.

• A 40% maintenance requirement may be needed if a position represents 70% - 100% of the total marginable long value and short value.

 

If I may suggest it may be simpler, if margin is restricted to a less ratio for stocks in different price ranges rather than the complex arrangement of the above. Just a thought, i.e perhaps stocks under $15 you would restrict to 4:1 margin, 2:1 for stocks under $5, etc. This is one of the methods other brokers like SureTrader and IB use to manage risk. I think it would come across clearer with this approach and easier for traders to build their approach from. A lot of hotkey scripts are a percentage of Buying Power, especially the smaller accounts, rather than share size.

 

Please note that I am providing my best suggestions on your firm for the best client experience possible and in no way criticizing. I am pleased to say that when Traders Elite Pro is running, the operation is seamless 99% of the time, fast executions, and quite stable. Client service has been very prompt with responses, follow-ups, and granting courtesy credits. I look forward to continuing to give feedback to help improve your firm and policies.

 

I cc'd Andrew Aziz and Ryan Woltering (admin at BB) on this email just so we can all help answer any questions we may come across at Bear Bull Traders.

 

 

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I'm new to daytrading so I'm not going to the biggest help but I think the maintenance means you need to have a certain amount as 'Cash' in order to short stocks.

 

So I guess the max you could short was 700 shares * $5 =3500 because that's how much you have as Cash in your account? Could be wrong. But thanks; they definitely need to let the customers know.

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Also another response on any outages on their platform (which runs through DAS), I think their outages are different than SureTrader's as SureTrader may have internal issues not related to DAS...I heard SureTrader does refund sometimes for errors on their end. Not sure on DAS outages.

 

They said that the issues I experienced were due to a DAS server issue and are not related to CMEG. At CMEG we do not share in clients' profits or losses that occur as a result of the software provided by third-party suppliers.

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Thanks badhairdude,

 

Yeah I think I got that part of the cash you need, but the first bullet says •16% maintenance requirement for stocks that are priced at more than $4 per share.

 

That is not 6:1 margin...that's 6.25:1?

 

• A 40% maintenance requirement may be needed if a position represents 70% – 100% of the total marginable long value and short value.

 

Not really sure what that means...you need 40% in cash...so if you had $4,000 in cash you can only buy $10,000 worth of stock??

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Brendon, these are just my guesses. I'm interested in hearing CMEG's official response.

 

They are rounding 16.667% to 16%. The true margin is 6:1. For the 40% maintenance requirement, maybe this means 2.5:1 margin if the position consumes 70% or more of your buying power? Perhaps they want to reduce the risk when you are highly concentrated in a single stock?

 

Thanks for sharing your correspondence. Please let us know what they come back with.

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