The Real Price of Discount Trading: Keeping Your Trading Costs Consistently Low Is a Challenge, Especially with the Bewildering Number and Wide Range of Fees, Charges and Commission Rates Being Marketed. Here We Will Try to Help You Be a Better Shopper

McMahon, Chris, Futures (Cedar Falls, IA)

All it takes is a quick flip to the back of this magazine to confirm that the cost of trading is plummeting. Consolidation in the brokerage industry and the rise of internet trading has created an environment of intense competition, pushing trading costs lower and lower.

Some futures brokerage firms are advertising fees of less than $2 for futures trading. But in trading, as with everything, there remains a wide range of possible fee structures and service levels for the retail trader and you have to know what questions to ask and to read the fine print to find what you need, get what you want and not overpay. But in trying to achieve that goal, it's easy to go too far in the other direction, paying next to nothing and getting exactly what you paid for.

"Back in the old days, the broker would take discretion and do all the trading and get input from the client about what the client wanted to trade and how much," says Joe Krutsinger, a registered information CTA and president of the trading system design firm that bears his name. "He really did do everything and that was all included in the fee. Nowadays we've got people who are trying to get everything for free. But free can be the most expensive thing you ever buy."

FIX PRIX, 'A LA CARTE & AUTOMAT

When shopping for a futures broker, the two most important things to know are: what you are paying for and what you are getting. At a minimum, a trader will pay an exchange transaction fee, a National Futures Association …

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Publication information: Article title: The Real Price of Discount Trading: Keeping Your Trading Costs Consistently Low Is a Challenge, Especially with the Bewildering Number and Wide Range of Fees, Charges and Commission Rates Being Marketed. Here We Will Try to Help You Be a Better Shopper. Contributors: McMahon, Chris - Author. Magazine title: Futures (Cedar Falls, IA). Volume: 35. Issue: 11 Publication date: September 2006. Page number: 60+. © 2009 Summit Business Media. COPYRIGHT 2006 Gale Group.

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