Futures contracts brokerage fee

In order to trade any of the e-mini futures contracts, one must have an account with a brokerage firm that offers e-mini products. Since the e-mini stock index futures contracts discussed in this tutorial are, in fact, futures contracts, a futures account is necessary. This account will be separate from other account types (such as accounts for trading stocks or Forex). Many traders have multiple accounts so that they are able to participate in various markets. When researching and selecting from among the dozens of brokerage firms that offer e-mini trading, it is important to take into consideration the following factors.

Regulation
The National Futures Association (NFA) is the self-regulatory organization for the U.S. futures industry that develops rules, programs and services to maintain market integrity, protect investors and help NFA members meet regulatory responsibilities. The NFA regulates every firm or individual who conducts futures trading business with public customers.

Traders and investors can check the registration status and disciplinary history of any futures firm or individual by searching on the NFA Web site ( Searches can be executed based on NFA ID Number, Firm Name, Individual Name and Pool Name (for commodity pools only).

The Federal Reserve Board, FINRA and securities exchanges regulate margin trading.

Fees and Commissions
While fees and commissions do change from time to time, an up-to-date list can be found on any reputable broker's Web site (the sites will also list pertinent initial margin and maintenance margin rates). Futures commissions are charged on a per side, per contract basis. For example, if a trader enters a long ES position with five contracts, the commission will be based on the trade entry (one side) multiplied by the five contracts. An additional commission will be assessed when the trade is closed (the "other" side of the trade). Often, commissions are on a sliding scale depending on the number of monthly contracts that are traded. In general, the more contracts that are traded each month, the lower the commission rates will be for each contract.

In addition to commissions, traders must also take into consideration (and pay) exchange execution and clearing fees. These vary by market and instrument, and by the trader's exchange membership level. Exchange fees for the ES and NQ, for example, are $1.14 per side, per contract, with an additional NFA Regulatory Fee of 2 cents per contract for non-members (current as of July 1, 2012).

Margin Requirements
A brokerage firm's margin rates will also be listed on its website. As discussed in the "Margin" section of this tutorial, margin rates are set by the exchanges but can be tightened by individual brokerage firms. In other words, a firm can require more stringent margin rules, but can never allow more relaxed rates than those set by the exchanges. Like the exchange requirements, brokerage requirements can change from time to time and without notice.

Figure 7 shows a spreadsheet with TradeStation's margin requirements (current as of July 1, 2012 and subject to change). The figure is included to provide an example of the various margin rates for different e-mini products.

Figure 7 - TradeStation margin requirements for the ES, NQ, YM and TF contracts (current as of July 1, 2012 and subject to change).

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