Generic CBOE/CBSX firms vs generic Canadian firms and the winner is Canadian firms hands down with the new CBOE/CBSX 90/10 payout model Lets compare (software, ECNs, routes, and SEC fees being equal for both) and leverage is same as well. Scenario 1 Trader has an edge of 1.5 cents per share and traded 1,000,000 shares. Gross profit is $15,000 for the month. Generic Canadian firm 80/20 payout model and dirt cheap commissions (they do not mark up commissions but traders pay what the firm pays from the cleaning firm) so lets use 5 mils $15,000 after payout $12,000 and now subtract commissions (5 mils is $500) = $11,500 Generic CBOE/CBSX firm 90/10 payout and average of about 35 mils for 1,000,000 million shares (some CBOE/CBSX firms are from the low 30-40 mils at the 1,000,000 volume mark) $15,000 after payout is now $13,500 and now subtract commissions your account is $10,000 Difference between the two $1500 monthly and an annual amount $18,000 ----------------------------------- Scenario 2 As we know most traders are not profitable, so our trader does not make any money but traded 1,000,000 shares in the month. Some winning days and some losing days and he ended up with flat. Trader did not make any money so he didnât have to pay out his profits, just his commissions of 5 mils (his account is only down $500 the month) Trader with generic CBOE/CBSX firm traded 1,000,000 shares at 35 mils and now his account is down $3500!!!! Again Canadian model is better. Trader didnât make any money but his account didnât get crushed. CBOE/CBSX firms are b/d they make money by marking up commissions, the commission game is dying as we know it. The margins are getting tighter and tighter. The Canadian firms make money on profitable traders not the churn and burn model. The year lock up. SEC Rule 15c3-1 is really in place for capital requirements but prop shops actually love this rule as the average trader is going to be stuck at this firm for 1 year. If you do not like your retail firm or Canadian firm you can just take your capital and go to the next. You need to wait for 1 yr before you get it back with the CBOE/CBSX model! If I do not like my account interactive brokers I will just switch to Lime brokerage or vice versa. The 1 yr lock up will keep the trader with the B/D typically till he churns his account to âclose cancelâ status and his money is gone. Itâs uncommon to see Canadian firms who have locks ups For the most part, the CBOE/CBSX trader joins a remote firm for leverage. Thatâs it for the most part. These firms have the lowest barriers to entry (typically 5k capital and no U4 S7) These firms are b/dâs who do not provide any value to the traders. Most of the remote firms provide no training, no special information, and no unique programming help. If have a software question you need to call your software provider, donât call us type of attitude, wait 2 months for your U4 to be cleared etc. I do not represent any Canadian firms, I just want to inform that the CBOE/CBSX model loses the Pepsi Challenge in every way.