I've been using Datek and I'm looking to using a direct access firm...I've done a recent study of my monthly volume and have read on Elite about being able to negotiate your commissions. I'm so use to the standard $9.95 ticket charge. What would or could I be able to negotiate and get at a direct access broker if I do on average 300-350k shares a month. With trades typically ranging from 4k-10k per ticket. Here's my past 4 months of volume... 257,000 538,000 434,000 271,000 Could I be able to get .0075?? or more like .01 per share? Any help would be appreciated thx.
You're not doing enough volume to negotiate rates with a prop firm, you'll probably just end up getting whatever they start rates at. Why don't you try pointdirex with thier .005/share retail ad that they have going here on ET? This is assuming you're going to be trading remote. You can find prop offices that start their rates near .0075, but you have to do a lot of calling around.
Okwano... I'm more of a positions/swing trader...I don't daytrade unless the position hits my target intraday. Anyways, what do u consider is the average volume needed to have any bargaining power with a direct access firm. Would one need to do more than 500k, 1mm??? BTW..are direct access firms and prop firms different??
Yes prop and DA are different. At prop you use firm's capital for leverage or all firms capital with a payout split. Seriously, look at interactive brokers. Their comissions are probably the cheapest you'll find. They are "Direct Access" and good for a swing trader like yourself.... I don't even know what the rates are. 1 penny for up to 500 and half a penny for each share above 500 ? You'll average well below a penny a share...
Depends on what rates your looking for. If your just looking for .0075, I am sure you can find that with your volume or any volume amount. But why pay .0075 when you have a place that advertises on ET at .005 for retail with no volume requirements? I think it would be hard to match .005 with a prop firm doing less than 30k-50k shares per day. This is based on my experience talking to different prop offices and talking to other traders. You're probably better off calling around for yourself.
Also, can you negotiate soft dollar??? I'm kinda in the woods in this area, but normally what percentage or how much of each share commission does a broker count as soft dollars for a customer. i.e. .01 cent per share, broker give .001 or .0001 or maybe 10% or 1% Thx for the help. Would definitely like to get away from the internet trading world.
Prop firms look for volume, and retail firms look for # trades. There are many firms out there that will offer a hybrid. You would have had much more room to negotiate, in the last 1.5 years because the firms lost many accounts. Here are some thinsg to consider when shopping around: 1) Don't tell anyone what you're volume is, unless you're a prop trader. Most prop guys do those type of volumes in one day. There is no reason why someone has to know that. 2) Since you're doing more swing, the retail pricing is something you need to look at. In that case, you need to look at the number of trades as your benchmark. That's what the firm will want to know. Direct access firms have ticket charges ranging anywhere from $11.95 to $4.95. When you say "soft dollar" I'll assume you're not a sell side broker who's getting kickback, I 'll assume you mean ECN rebates (ARCA, ISLD, and INCA). I haven't seen too many swingers get the rebate, that's something that retail day traders (200 plus tickets per month) get. All firms that use ARCA, ISLD, and INCA) get a kickback (liquidity rebate) from those ECNs. It doesn't necessarily mean that you're entitled to it. Additionally, when it comes to ECNs, they pay (for adding liquidity) and charge (for removing liquidity). Before you shop around, check out the sites for ARCA, ISLD, and INCA. You may not get the the kickback (and I'm betting you won't because if you're swinging, the tickets aren't there). Make sure you don't get charged over and beyond what the B/D is getting charged by the ECN. 3) Last. make sure that the ticket charge is on a transactional basis, not a per fill basis. Some firms advertise, $1.00 tickets, and when you get there you fin out it was per fill. That means you hit a bid for 1,000 shares and it comes back in 5 fills, they'll charge you $5.00. If you need more help, which I'm glad to provide, shoot me a P/M. Good luck!
Since IB was mentioned, I'll confirm that the fees are 1 penny for the first 500 and 1/2 penny thereafter. There are no ticket fees, no SEC charges, no added ECN fees etc. Thus the fee for 1000 shares is $7.50. In addition, the financing rates are probably the best in the business and the Group is now the 25th largest security firm in America with over 1.2 billion in capital and very little debt. With IB the rates are fixed and non-negotiable.