30% payout w/ no comm

Discussion in 'Prop Firms' started by wefundhms, Oct 9, 2003.

  1. Do you have to bring in capital?
    #11     Oct 10, 2003
  2. agras01


    If I have the capital over 25k would it be wise to trade with 0.5 cents per share plus ECN fees? Retail account ofcourse.

    #12     Oct 10, 2003
  3. Mecro


    No cap down and none of that BS non-compete agreement, I would take that deal right now.

    But who knows when times will change and that 30% payout, no commish will become a rip off.
    #13     Oct 10, 2003
  4. Ive been reading these comments and I have to agree with everyone......this sounds more like an 'order desk' or a market making firm ....what you just presented was the same thing we use to give our traders on a market making desk ......in 1997!!!

    is this a daytrading shop or an orderdesk/ECN or Market making desk????
    #14     Oct 10, 2003
  5. This is offer from a firm where I trade, unless someone is copying the deal exactly to the T.

    The contract is a new thing now - and it was a result of several events that happened. I also know that the contract applies if they teach you their style and you take the 0 commission deal.

    Otherwise, I'm not going to say much but if you are an experienced trader you should be able to figure out what 30% with no commission is compared to 80% with commission.
    If your net/share ratio is high - then go with a higher payout.

    What I do know is that they offer higher payouts with commission - if you choose. (the commission I beleive is .3 of a share - however I may be wrong on this one).

    Most importantly I know of a lot of traders who make a lot of money who would've been negative if they paid commission (myself included). But that is a specific style of trading.

    However all traders should look at this simple thing and then decide:

    Your Gross.
    - Commissions
    - ECN Fees
    + ECN Rebates
    = Net
    Net x YOUR PAYOUT% = CP (commissioned payout)

    Your Gross
    -ECN Fees
    +ECN Rebates

    Net x 30% = NCP (non commissioned payout)

    then look whether CP>NCP

    I know a lot of traders have Gross + and Net Negative because of commissions. In that case 100% of a neg. number is smaller than 1% of a positive one.

    However, many good experienced traders know that their commissions are only a tiny part of their Gross - so they will go to a higher payout (Obviously). Unfortunately, I'm not one of those - but I do know a lot of those people

    Its a matter of your trading ability.

    But you cannot compare 30% to 80% directly without knowing how much commission are you paying.

    Just plug numbers into the formula on top and you will have your answer!
    #15     Oct 10, 2003


    If you have money to fund a prop account, you can get a low commission rate AND a full 100% payout. Why give any of your profits away?

    #16     Oct 10, 2003
  7. Thats true,

    But you still have to see whether CP > NCP.
    #17     Oct 10, 2003
  8. axehawk



    This sounds oddly familiar. I won't mention any names, but it sounds like this firm is one of those liquidity trading firms.

    Any guesses?
    #18     Oct 10, 2003
  9. Here is a simpler solution.

    In fact, I think this will be a good excersize for all traders.

    Attached is an excel spreadsheet that calculates which commission vs payout is better.

    Plug in your numbers. See what you get.
    #19     Oct 10, 2003
  10. What is the going 'average' payout when no commissions are paid?

    50%? Or is that on the high end ...
    #20     Oct 10, 2003