Better Deal...

Discussion in 'Prop Firms' started by baller1069, Aug 26, 2007.

  1. I know it all depends on what shares you trade and your style etc, etc - but which is the better deal in your opinion

    75% payout .001/share

    or 100% payout .005/share?
  2. Neither....shoot for middle ground :)
  3. You are asking a question that can not reasonably be answered without more detail. You need to consider things such as ;

    1. how many shares a day do you trade?

    2. Does your style / strategy permit you to increase your trade costs by a factor of 5 to gain an additional 25%?

    3. Is it worth impacting the way you trade (see #2) to gain an additional 25%? If you don't understand what I mean consider this; when your costs go up, especially five fold, will you hesitate to trade as aggressively as with a lower cost model and hence miss some opportunities that you may have otherwise taken. And on the flip side, you only split profit you make, where as you pay 100% of the commission on every trade you make. This becomes painfully obvious when you have a bad losing day where you tried to 'dig yourself out' , only to end up with a heap of commissions that piled up at a faster rate on the 100% payout model.

    4. Is there a requirement to post risk capital to get 100% vs. no or less capital to get 75%?

    Just a couple of the details/considerations that are necessary to truly evaluate the choice you have posed.

  4. mnx


    I agree with Automate 100%... As For myself, I'd be far more comfortable with
    the 75% deal... I'd definitely hesitate to trade if my costs were 5 times higher...

    - mnx

  5. nugundam


    Excellent points you have made there (couldn't agree more;) and just wanted to stress the importance of answering those questions when deciding on finding out the better deal (one has to do a cost/benefit analysis on their previous trading data and even then it is still hard to precisely state which is better due to the impact of the change in cost structure on the psychology of trading).

    I've read many posts complaining about different prop. firms and how only an idiot would stick it out with such and such firm because there are better deals out there but the truth is maybe for that individual thats the case because their trading strategy permits it but I would not make a generalization for everyone. Since each person has a unique trading strategy that fits his/her personality it only makes sense that they are better off with some prop. firms than others (each has its pros and cons). I can't say there is the ultimate prop. firm because it depends on your style really (personally i can't find a better one than what i'm with currently which is $0.01 for 100 shares (there is a cap) inclusive of clearing fees, plus 100% rebates passed on. In essence i can be a credit/rebate trader on 100 share lots and IMHO that's the most competitive rate i've ever seen;)