Interested in your thoughts on which would rather have: (1) Would you like low comissions and a profit split or (2) higher commissions and get to keep 100%? I assume the answer will vary based on trading activity, styles and deposit requirements. Looking forward to the debate.
Fair enough but if you are just starting out or you fall into the camp that believes stayle are always adapting or changing this becomes an important consideration. Unless you plann on changing firms everytime you modify or adapt you style.
yes and no. as it turns out, many firms that use to charge absurd rates (.007 and up, not all in) have changed in the past year. if you actually trade stocks actively, you know how fees break down. if a firm offers .004 all in, and you take liquidity a decent amount of time: a. .004 all in, its not bad for you b. the firm just doesn't make crap depending on who they clear through. For example, take any Assent related firm. despite being the italian mafia, what do you really think they make when: 1. your noobs are constantly hitting out and in with arca or any ecn. thats instant .006-.008 roundtrip to the ecn...you do the math. In a futs shop, if somebody had to pay 6-8 roundtrip for any product, they'd say it was impossible to make money. and thats just the ecn fee. They don't get what title or swift does just based on volume, it just costs more to use anvil ect. Even if they cleared for Free, its not profitable. The ave pass thru for many, many decent profitable scalpers is .001-.0025. (i mean just take a look at redinks pass thru...nobody is about to say he isn't a scalper and just look at that column) Sec fee. If you currently trade, you know this is another .001 for anyone who scalps a variety of stock. if you only scalped 60-80 buck stock, wow, you can double that fee. ave pass thru for a GOOD scalper .001-.0025 plus sec fee: .001 min -.002 i mean you do the math All in includes the sec and ecn. at .004 all in, which is what most higher costing shops have shifted to, its not a money making machine. I mean i've heard of a place whose costs were a .002 ALL IN, but they were running a bunch of bots that just added liquidity so i'm not sure who was getting ripped off there.... what is a money making machine are obviously firms taking a deposit (free money) and the unknown factors involved at a Swift/Title. unknown is when they hit the volume threshold for the ecn, how much of the kickback they give back to traders. I'm not accusing them, I know their misc fees are retarded low aside from the commish (no mysterious 'transact fee' like genesis) but it has to make you wonder...if they hit the threshold for just 1 ecn and you get .0022-.0024 but they're getting an extra .0004 -.0006 from the ecn...on just hitting the threshold around 30 some mill a day, you do the math, thats like fuck you opera rich at the end of the month...and thats just for the bare min and only 1 ecn. i know they give some back, i'm just saying you'll never, ever know exactly how much.
I didn't know Sungard was Italian, or part of the mafia? Do their 20,000 employees around the world know this?
The option that makes the most money. Someone doing 40k volume daily is much better off with a high payout/high commish deal. Someone doing 500-600k volume daily is much better off with a lower payout/dirt cheap commish.
Do any of your firms allow you to select a different structure as your style morphs? I assume most shops are set up for one particular approach?
The answer is complicated if you are a profitable trader you tend not to worry about commissions. Obviously if you are a high volume trader you ask for the best fee level, if not demand it. A trader who can gross 8k in a month and has to pay the split and a lower commission fee. VS a no split and a higher commission fee I am sure the no split net will always be greater. Unless your strategy is credit trading etc... The only people who can not see this are the ones who are not profitable. But I would rather payout 2k if I had to in higher commissions a month and keep close to 100% of the net profit rather then pay out $500 in lower commissions and pay the additional 3k to the Firm. as a 60-40 split would. Based on the above number of 8k there is a huge difference. RIGHT? B
Was expecting some feed back from the high volume traders out there. I guess everyone feels the same? B
Are you kidding me? In the past, I remember guys who literally went from marginally profitable to making a good living by simply switching firms and getting a proper lower commission rate among with reduced expenses. It's not just the monetary factor, it is also mental. Plus, lower commissions allow for more opportunities, as the risk/reward gets a tiny nudge in your favor.