29% gross or 65% net?

Discussion in 'Prop Firms' started by southlaketrader, Aug 7, 2006.

Which is better?

  1. no commissions and paid 29% of gross profits

    10 vote(s)
    47.6%
  2. .0075 cents per share commission rate and paid 65% of net

    11 vote(s)
    52.4%
  1. Agree this firm gives large buying power - but I never saw a
    salary (If its the firm mentioned earlier in the link) - they also
    don't necessarily like overnights. After all prop. firms make
    most of their money on churn.
     
    #11     Aug 10, 2006
  2. EricP

    EricP

    As others have said, it doesn't seem like a great deal either way. However, to answer your question, it's a simple math problem:

    x = gross profits in cents per share

    0.29x = 0.65 (x - 0.75)

    => x = 1.354 cents per share

    => If your system makes a profit of 1.354 cents per share, then both systems will give you the identical return (both will let you 'take home' 0.39 cents per share traded).

    => If your average profits are ABOVE 1.354 cents per share, then you will be better off with the 0.0075 commission 'deal'.

    => If your average profits are BELOW 1.354 cents per share, then you will be better off with zero commission 'deal'.
     
    #12     Aug 10, 2006