Carley Garner's Blog: What's new on DeCarleyTrading.com, page 48
January 8, 2014
Tim Bourquin and Carley Garner on COT Reports
Carley Garner and Tim Bourquin of the MoneyShow.com sat down at the Traders Expo in Las Vegas to "talk shop". Click the link below to listen to what they had to say about seeking overheated markets using the CFTC's COT (Commitments of Traders Report). If you are unfamiliar with the COT Report issued by the Commodity Trading Commission, it is a weekly statistics report to identify which types of traders are holding net long or short positions in the various commodity markets. There isn't an equivalent report available to stock traders, but it can be thought of as being similar to insider trading filings in the equity markets. 
We use the COT Report often to identify markets that might have garnered too much speculative attention in a common direction. Click below for complimentary access to this interview.
Click here to view the Carley Garner interview regarding COT Reports
DeCarley Trading
1-866-790-8723(TRADE)
info@decarleytrading.com
www.ATradersFirstBookonCommodities.com
*THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS.
December 26, 2013
Money Show Interview with Carley Garner
Carley Garner and Tim Bourquin of the MoneyShow.com sat down at the Traders Expo in Las Vegas to "talk shop". Listen to what they had to say about using the CME's e-Micro futures contracts to position trade with lower margins, risk, and stress.
Click here to view this short and sweet video on e-Micro trading
DeCarley Trading (a Division of Zaner)
1-866-790-TRADE(8723)
info@decarleytrading.com
www.ATradersFirstBookonCommodities.com
December 19, 2013
CME Fee Increases Proposed for Futures Traders and Brokers
There are certainly more questions than answers, but it is clear the CME Group intends to increase both transaction fees and the cost of accessing market price data within trading platforms. *Please note this will have no impact on those who don't use electronic trading platforms to monitor/place trades.
In our view, the transaction fees likely won't have much of an impact on the average trader. The increase is moderate, and should be more of an annoyance than a burden.
However, if the CME proceeds in charging traders for access to real time quotes within a trading platform the impact will be more noticeable. This could be occurring as early as March of 2014.
Keep in mind that we are actively and thoroughly opposing these increases in costs to retail traders (which will be levied regardless of brokerage firm or trading platform). We are also confident that platform programmers will find ways to mitigate the impact of the CME data fee policy to traders via platform upgrades such as slightly delayed quotes, or other optional comprimises; nonetheless, we wanted all of our clients and prospects to be aware of the proposal on the table.
We've recently written an article that is currently published on Trader Planet with our thoughts on how the changes might impact retail traders.
Click here to read our article on Trader Planet
In our opinion, the most profound burden of the new CME fee policies will lie on brokerage firms; more specifically, individual brokers who are responsible for covering the cost of their market data. Brokers, and others who qualify for the CME's definition of "Professional" are subject to pay data fees per platform, per device; this could inflate market access costs to multiple thousands of dollars per month, per broker. If you are interested in reading our views on this, the NIBA (National Introducing Broker Association) will be highlighting some of our opinions in their next newsletter. We've also posted our thoughts on our website.
Click here to view our opinion on the potentially excessive market data fees proposed to be charged to "Professionals"
Please keep in mind that this email is meant for informational purposes only. We are not certain what, if any, data fee increases will look like in the future but we wanted to make sure our followers were privy on the subject to avoid any surprises down the road.
DeCarley Trading
info@decarleytrading.com
1-866-790-TRADE(8723)
www.ATradersFirstBookonCommodities.com
*There is substantial risk of loss in trading futures and options.
December 5, 2013
Nominee for Best Brokerage Service by Trader Planet
We are honored to have DeCarley Trading nominated for a Trader Planet 2013 STAR Broker award!DeCarley Trading works tirelessly to provide superior futures and options brokerage services for traders of all types and sizes at competitive rates. We are humbled, and ecstatic, to be recognized for our efforts in the 2013 Trader Planet STAR awards.
Please take a second to vote for us in the "Brokerage Service" category of the Trader Planet STAR awards. It only takes a second to cast a ballot (you can vote once each day in December).
Simply click on the link below, locate the category "Brokerage Service" and choose "DeCarley Trading". (While you are there, please vote for Carley's book "A Trader's First Book on Commodities" in the "Book" category).
We appreciate your business and your support!
Please click here to vote DeCarley Trading as best "Brokerage Service"!
Click here to open a trading account with DeCarley to find out for yourself why we were nominated for best broker!
DeCarley Trading (a division of Zaner Group)
www.DeCarleyTrading.com
1-866-790-(TRADE) 8723
info@decarleytrading.com
*THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS.
December 3, 2013
IBs,CTAs, and APs could be forced out of the futures business
We have little doubt the proposed CME Group fee increases, particularly for market data access, will have a profoundly negative impact on the number of industry service personal (IBs, CTAs, and APs) as well as retail speculators. We suspect the changes could trigger a potential drop in trading volume in our particular book of business by 20% to 30%. Additionally, small brokerage operations such as ourselves could be driven out of business at the hands of substantially higher fixed costs in the form of data fees, in combination with decreases in trading volume.
Here are some comments and concerns we would like to express:
Data fees per device is unreasonable, and dramatically impairs the industry
In a post PFG and MF Global world, IBs have shifted toward independence. As a victim of PFG’s in which 100% of our business was lost; we have spent the last 2 years scrambling to diversify our clients among various FCMs. Accordingly, that involves the simultaneous use of multiple platforms. Should the new CME fee structure be charged per device, the cost to the average broker would be astronomical. For example, we have clients spread between about 8 trading platforms; this could potentially trigger an expense of close to $3,000 per month per broker. Many brokers in this business fail to make enough in commission to cover this expense and will simply be forced into a career change.
Excessive burden on the members of the industry least capable of bearing the load
Unfortunately, discount brokerage firms have led to the cannibalization of the industry. As time goes on, commission rates go down, making it even tougher for IBs and APs to make a living in the futures industry. Despite popular assumption, most individual futures brokers make a very modest living.
In many cases, the round turn expense charged to clients for commission, clearing fees and platform fees combined are less than the CME Group’s standard exchange fees. Simply, it is irrational to ask the party bearing the most risk and possibly generating the least revenue on the clients the he has worked hard to acquire to carry the brunt of the expenses. Meanwhile, the CME makes $2.60 per trade on each and every trade executed by the clients of ALL retail brokers and carries very little risk in servicing retail clients.
Deter clients/broker from spreading risk between FCMs
Charging excessive data fees for each device will undoubtedly prevent brokers from recommending clients allocate funds between multiple FCMs to protect against a PFG or MF Global repeat. As a result, client funds and the “books” of brokers will lack the safety and peace of mind diversification can offer.
In my opinion this will likely discourage larger trading accounts, and therefore, have a negative impact on volume and risk management.
Fewer brokers to solicit clients to trade
The CME Group’s policy of charging professionals data fees per device is a gross underestimation of how important brokers are to the industry. Both discount online and full service retail clients are largely attracted to the industry by the marketing efforts of brokerage firms, IBs, etc. The new CME fee policy will likely nearly immediately reduce the number of IBs and brokers (APs) simply because they won’t want to work hard to pay CME fees without a paycheck for themselves.
Prevent brokers from properly monitoring and managing client risk
The hefty burden of data fees necessary to keep multiple platforms running will lead to far less risk management. For instance, there are some platforms in which we only have a few clients. Paying several hundred dollars simply to continue having broker access is unreasonable. Should the proposed fee structure be implemented, we will opt to forgo access to certain platforms. Not only does this hinder our ability to service clients (place orders for them, verify positions/orders, etc) but it will nearly eliminate our ability to monitor the debit risk of these clients. The decreased level of risk management is a liability to the brokers and IBs, as well as the FCMs, and even the CME Group.
Fewer brokers to retain clients (help them avoid common pitfalls, provide basic trade support)
If our assumption is true and the fee increase leads to fewer brokers; the impact to the industry will not stop at the diminished ability to open new trading accounts. The trading accounts that are opened are likely to be less successful; consequently, they will trade lower volume over a shorter time frame. This is because brokerage firms of all service levels (deep discount or full-service) will be less efficient at providing quality client services that are imperative to help clients survive the treacherous world of leveraged speculation.
Deter “come and go” clients from participating at all
We’ve made a good living over the years servicing clients that “come and go”; so has the CME Group. For example, a client might trade for a month or two, and then take several weeks off. Most leave funds in their account in preparation of the next round of trading opportunities, others don’t. In any case, we believe that many of these types of clients will find the hassles of data fees during their down time deter them from participating in the markets at all. Particularly those that tend to leave funded accounts inactive for moderate periods before resuming trading again; the fees will encourage them to take funds out of the account to avoid data fees, and they might never come back. We’ve all worked hard to provide a convenient environment for futures traders and it is evident in the trading volume the CME has benefited from, but consumers are fickle; they might find new hobbies or interests.
Any additional data fee revenue will likely be overshadowed by loss in volume trading fees
The CME Group is assuming increased data fees will increase their overall revenue, but this is probably a fallacy. We all know that volume based revenue has the potential to far outweigh subscription fees in this business. In this instance, we strongly believe increased data fees will be a substantial obstacle for brokers and retail traders to generate trading volume. Accordingly, the higher data fees could very easily be dwarfed by the drop in transaction fees.
It is impossible to predict the future, but we estimate that volume amongst our clients could see a 20 to 30% decline as the new fee structure weeds out many small retail traders. Individually, their impact is minor but as a group these traders make a significant impact on transaction fee revenue for both the CME Group and brokers.
CME is the only party that has control over its expenses, it is unfair to ask parties lacking control to carry the weight
Any money problems the CME Group is experiencing, arguably isn’t at the hand of a lack of revenue. Transaction fees on retail trading business ranging from $0.80 to $2.60 adds up to a substantial amount of money every trading day. Rather than cripple an industry still trying to recover from PFG and MF Global, there must be ways the CME can cut expenses such as delisting illiquid products and abolishing open outcry data.
Forcing users to pay for open outcry data is inefficient
On the surface, it appears as though the proposed data fees are a way to force market participants to pay for open outcry data. However, very few traders or brokers need, or want, access to open outcry information. If the CME Group cannot justify the costs of disseminating pit data under the current fee structure, perhaps it should consider dropping the service in markets in which it makes little economic sense; or maybe even altogether. Expecting uninterested users to reluctantly carry the burden to the point that leads many to the unemployment line is inefficient and counterproductive to industry growth.
Speculators will likely migrate to stocks (deposits are guaranteed and data is cheap/free)
Although the CME Group controls most of the market for U.S. futures, speculators have other options. For instance, we suspect traders will migrate to Eurex products, equities, and FOREX to avoid paying data fees. It is important to recognize that when people are accustomed to getting something for free, they have a hard time adjusting to any type of pay for use model. The ICE exchange has been charging for live chart fees for years; we’ve found that it simply encourages retail traders to trade the grains on the CME Group instead.
Brokerage firms and platform vendors have spent substantial amounts of money on development, with the assumption of the pre-existing fee structure
Software development takes a considerable amount of time and money; as the futures markets turned to electronic trading and data distributions, brokerage houses and platform vendors allocated substantial resources to improve market access for retail traders. They did so with the assumption of the current fee structure, and with expectations of growth in the industry. The proposed fee structure might be substantially antagonistic to their efforts. In our opinion, this is an unfair affliction.
Anti-trust violation?
The CME Group is by far the largest player in the U.S. futures arena, and is questionably running a monopolistic entity. Passing on what could potentially be crippling fees to IBs, FCMs, and other market participants in an environment that lacks real competition is considered by many a potential violation of anti-trust regulations.
Please let the CME know how you feel
An increase in fees is always a tax to the industry and, therefore, generally unwelcome. However, in this particular case the impact could be catastrophic to an industry that has already been hit hard. We aren’t complaining because the new fee structure is inconvenient, we are voicing our opinion because it has the ability to force many of our friends out of the business altogether.
It is clear the CME assumed their “Professional” designation for data fees would only impact those with deep pockets, but that couldn’t be further from the truth. Data feed fees are paid by individual brokers in a business that has a survival rate of less than 10%. If the goal of this policy is to eliminate the retail broker, and thus retail traders; it is a brilliant plan. Hopefully, the CME Group will reconsider and work to come up with a reasonable solution that enables all of us to continue working in the industry we love.
Please let the CME Group know how you feel. Use this comment box: http://co1.qualtrics.com/SE/?SID=SV_7VgYr6gExpoRxDn
Or send an email to: marketdata@cmegroup.com and info@cmegroup.com
Carley Garner
Futures, Options, Integrity
1-702-947-0701
December 2, 2013
Vote for us, best Commodity Trading Book
We are competing as a Finalist in the 2013 TraderPlanet STAR AwardsA Trader's First Book on Commodities, written by Carley Garner of DeCarley Trading, has been named a finalist in the book category of TraderPlanet.com's "Best of 2013".
We’re honored to be recognized by TraderPlanet’s editorial staff for our products and services that provide exemplary value to traders.
To win our respective category award, we’re requesting your help to prepare the ballot on TraderPlanet.com and register a vote on our behalf.
Click here to vote for "A Trader's First Book on Commodities"
We appreciate your support!
DeCarley Trading
www.DeCarleyTrading.com
info@decarleytrading.com
1-866-790-TRADE(8723)
November 27, 2013
Jim Cramer talks Carley Garner Analysis on Mad Money
We can't think of a better portrayal of investor's tendency to be fickle than the gold futures market. However, sometimes when "everyone" has given up on a market, is exactly when it becomes most interesting. Is it time to turn bullish?
Crude oil, on the other hand, will likely see continued liquidation of longs before any type of bottom can be formed. There are just too many bulls! Our analysis was recently quoted in a CNBC article; click here to read: http://www.cnbc.com/id/101229705
Jim Cramer's "Off the Charts" segment used Carley Garner's gold and crude oil chart analysis in the November 27th show!
One of our recent issues of the DeCarley Perspective focused on this topic was featured on CNBC's Mad Money on November 27th. The DeCarley Perspective is a publication distributed exclusively to DeCarley's brokerage clients. If you are interested in being part of the loop, open a trading account today!
Click here to check out the archive of the November 27th Mad Money segment featuring DeCarley analysis! (Scroll to 30:10 for our segment)
If you haven't already enjoyed a trial of DeCarley Trading newsletters, you can register here.
**If you would like to open an account to trade via one of our state-of-the-art trading platforms, or with an experienced broker, click here.
DeCarley Trading, a division of Zaner
1-866-790-TRADE(8723)
info@decarleytrading.com
http://www.ATradersFirstBookonCommodities.com
http://www.DeCarleyTrading.com
***THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS!**
November 18, 2013
Trade Currency futures, options, FX and e-micro futures
View the archive of our currency futures and options class hosted by Big Mike's Trading.
Click here for free access to the archive of "Currency Markets Simplified"
In the class we discussed currency trading in the futures markets, with some comparisons to the FX markets. Topics covered include:
* Currency Trading: Simplified by the Futures Market
* A comparison of Forex, Equity ETFs and Futures
* Truths and Myths about currency market liquidity
* Quoting and calculating in currencies
* Margins, margins, margins
* Currency options
* Dollar cost averaging with E-micro futures contracts
Click here for free access to the archive of this currency futures, options and FOREX class
DeCarley Trading
1-866-790-8723(TRADE)
www.decarleytrading.com
info@decarleytrading.com
www.ATradersFirstBookonCommodities.com
* THERE IS SUBSTANTIAL RISK IN TRADING FUTURES, OPTIONS, AND FOREX.
November 14, 2013
E-Micro Gold Futures Enable Dollar Cost Averaging
Gold is the epitome of a commodity market; yet it can be one of the most treacherous to participate in. Those looking for high levels volatility need not look any further. The precious metal’s price is capable of volatile price swings that can make even the soundest of traders look foolish. But it has also been known to churn wealth to the greenest of traders which keeps speculators intrigued.
Many small retail traders have simply given up on the idea of speculating in the high-risk, high-margined, yellow metal at the hands of a tumultuous trading experience. For some traders the standard sized gold futures of 100 ounces is simply too big for comfortable position trading and alternatives such as ETFs are inefficient instruments for commodity speculation due to fund rebalancing and fees. However, for those traders with low risk tolerance, or a preference for sound sleep, there is a way to participate in the pure speculation futures markets offer with manageable risk: e-Micro gold futures.
Read the entire article on TraderPlanet.com...
*THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS!
DeCarley Trading
www.ATradersFirstBookonCommodities.com
1-866-790-TRADE(8723)
info@decarleytrading.com
October 22, 2013
See us at the LV Traders Expo
Carley Garner will be Speaking at the Traders Expo in Las Vegas on November 21st!Register for the Las Vegas Traders Expo for free by clicking here
Event details:
Option Selling with Purpose--Counter-Trend Premium Collection
Too many option sellers fall into the trap of believing that premium collection is as easy as blindly selling premium and waiting for time to go by. After all, more options than not expire worthless; right? Nonetheless, there is no such thing as easy money and option sellers face unlimited risk.
Option sellers might be better served by actively participating in the trade by averaging in and out, using volatility as entry and exit signals, and reading the option market's emotion.
We believe that option selling offers traders ample room for error and relatively attractive odds of success from a statistic standpoint but that doesn't mean that timing is irrelevant.
Measuring volatility in conjunction with futures price speculation is imperative to favorable entry points for option sellers and could be the key to avoiding the psychological turmoil and catastrophic results that you have probably read about. This session will show you how to determine why and when to sell options!
Here is a list of the key points covered in this presentation:
• Why Sell Options?
• Who Should Sell Options?
• Is the Trend Really an Option Seller's Friend?
• Timing is Everything
• Shopping for Premium
• Maximizing Premium Collected
• Why Letting Options Expire Worthless Might be Foolish
• Reacting to Adverse Price and Volatility Moves
DeCarley Trading
www.DeCarleyTrading.com
1-866-790-TRADE(8723)
info@decarleytrading.com
www.ATradersFirstBookonCommodities.com
*THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS.
*THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS!
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