But Goldman doesn't charge the rates, you do. Don't they give you a wholesale rate that you markup to your traders? That's how it works pretty much everywhere. I'm sure you do pay daily interest on account balances, the issue is account balances that are lower than they should be because of paying an exorbitant rate throughout the month before it's rebated back. For example, say I trade 200,000 shares a day at a .4 rate. At the end of the month I've paid about $40,000 in commissions instead of the $16,000 I should have. Who collects the interest on the $24,000 difference? Not me because the money's not in my account, it's in yours. And if I hold a lot of overnight positions I'm paying more in haircut as well because that is calculated based on account equity. But hey, you've got those balance sheets....
For those of you who haven't been on the board for more than a couple of years, I thought I would pass on how I found out about ET, and what transpired a few years ago....FWIW. We had a couple of ex-managers, both of whom got involved in starting other Firms...and they had put some weird compensation package together to "recruit" (poach) traders from Bright. So these guys started making ridiculous (even libelous) statements about my brother, me, our firm etc. I came on to simply clear things up with the facts, and when I signed up I though I would take the 'high road" - not use an alias (no big deal, just thought it made sense). I went through months of clarifying, discussing, answering questions, and doing my best to "keep my cool" - some of these kids were gawdawful (make you guys seem like long lost friends, LOL). Well, after a few months I noticed that I was getting mailboxes full of emails, very complimentary, and we ended up getting traders from other firms (withou soliciting I might add)... dozens to begin with, maybe hundreds by now, from ET (don't tell Baron, it may go to his head, LOL). Since I have been on message boards since the early 1980's (The Source, before internet)...I felt comforable in the community and actually started to enjoy spending some "down time" here. I started getting good questions for my column in Stocks and Commodities, many of which ended up in print. Good ideas for the radio show, etc. Sure, some of the verbal assaults were just plain vicious and wrong, and some of things mentioned actually helped us adapt our business model when justified (things have really changed over the years).... The really interesting side bar to all of this is that if those initial firms were to have benefitted from the growht that we enjoyed from ET, they would have doubled or tripled the size of their firms. A bit of justification in the long run for spending time here. 90+ of the people I speak with are super, ask good questions, answer questions, and when we get together we enjoy some laughs....and some, for whatever reasons (some perhaps justified, some not)...seem to enjoy what I call the venomous nature of some discussions (too many to point out, and I stay out of those that don't concern us)...and this is too much like the "Neo-Cons vs. the Libs" - (an attitude that I really think has hurt our Country overall, I am a registered independent, FWIW).. I don't like "flaming" As far as prop firms go, there are a small handful left (literally hundreds back in the day)...we know each other pretty well... some have made "cold calls" here on occasion, just to see what we're doing...I don't really care, I am honest with everyone... and all the supterfuge has pretty much gone away.... we have grown, added affiliates and partners, and continue to do our best. I always suggest doing homework, become aware of all the details involved in any business venture...and yes, (you knew it was coming)...."check the balance sheets"...... All this done with a smile...gotta keep your sense of humor.... Sorry for the long post, I just thought some might find it to be of interest...
(I just posted above, gotta take a second to laugh once again about the "balance sheets"....LOL)... You have a valid point. $24,000 (take half since it accumulates all month)...12,000 x 4% per year divided by 12 months would be about $40 per month (do I have the decimal point right?... brain is tired from all this keyboarding today).... GS does charge the traders, all the same amount...GS will not charge different rates to different traders, and since we have so many groups and affiliates who have varying charges, they have to have it added....so the penny makes sense from a bookeeping standpoint.... there is a lot that we have no control over, part of doing business. And, yeah, we make a profit, and we're still here, safe and secure. All the best, Don
More like $12,000/mo * 12 months= $144,000 * (4%/12)=$480/month The haircut costs could be much higher than that if your equity is hit by 20, 30, 40% Not a deal breaker for a volume trader, but it equates to a hidden cost and coudl be significant to someone paying a lot in haircut. Not slammin' you at all Don, I think you're an upstanding fellow. Just contributing to the discussion and voicing a concern that I've heard from some past and present Bright traders. Corey
Hmmmm? Let's see. If I have $12,000 in the bank I think I receive $480 per year divided by 12 = $40. Each month is a new time frame and rebate...so 12 x $40 = $480 ...you would be running a "revolving credit" of 12,000 all the time. It starts fresh every month, correct.? And, you're being paid back to zero each month. I think my brain is feeling better, this should be right. ( Since Corey is one of the smartest traders on the board, I want to be correct on this).... Don
Don, I'm glad that you have found some good reasons to stick around on ET. I was with Bright for a while, largely because of your presence and support in these groups. You seemed smart, willing to teach, and open. There are criticisms, sure, but I learned quickly that each firm handles things a little differently, and what would be profitable/acceptable to one trader would be a death blow to another. Right now, I'm with a firm that offers much lower rates for each trade, but offers no overnight leverage (it was work to have the agree to let me hold anything overnight!). That's fine for right now, but any pairs trader would doubtless disagree. Thanks for sticking around, and maybe I'll find myself back at Bright in the future.
Thanks...it's always nice to hear positive comments (even if you're trading somewhere else).... I realize that there are "super discount" rates out there, but there is usually several trade-offs, you mentioned a big one. You're welcome back (they alllllways come back, LOL).. Don
No sweat, it happens to the best of us....and, yeah, Public Accounting for a few years...got really, really, tired of counting other people's money, LOL. Don
What are the "professional fee rates" for quotes? The vendors charge the trading group a monthly rate for the data feed. There is no extra charge if the data is distributed over the internet to 1 or 1,000 computers. As for the software, there is no cost to the trading group for multiple installations. The software is a necessity for doing business. I take issue to the $200 a month desk fee, whether it is rebated or not. It is completely unnecessary, ESPECIALLY if you're paying a penny a share.