To be honest ... Career as a rebate trader will not last very long in my opinion. Wouldn't you agree? When these rebate gimmicks disappear from the ECNs, what do you do next? And one can only pray that the volume starts picking up again... or else... anyways, it's definitely not something I would do as a 'trader', it seems to set all the wrong disciplines in a trader. I respect whatever strategy or method traders use, as long as they make money =) How long would they last is a different issue.
$0.006 "all in" what? SEC fees + commissions? Do you get your full rebates on top of that? Do they mark them up/down? If your true ECN costs are 0.4 cents I would guess that you're taking liquidity much more often than you're providing it. Where are you getting $0.006 all in? The lowest rate I've seen so far is Pointdirex (Xoom) at $0.0075 "all in".
Doesn't include SEC taxes. Only commissions. Rebates are minimal because I don't add much liquidity. I'd rather pay the offer in a stock that's moving up than try to get hit on the bid. Usually if I get hit on the bid in a volatile stock, then the momentum is petering out and I shouldn't be in the stock anymore, unless I play the range game (which I don't do very much). With liquid penny stocks, it's hard to tell what's going on because big blocks are constantly going off at the bid and the offer. Big market maker prints become less meaningful and it becomes a crap shoot.
The are many reasons why people try to become traders. Obviously, one of them is for the MONEY. For me that was second behind the mental and psychological aspects. I like immediate feedback (P&L), I like being my own boss and I like to use my creativity in finding trades and getting the satisfaction that I beat the rest of the market to the idea. Rebate trading to me gives no positive mental feedback. I might as well have gone to mechanics school. It is trying to make trading into a science when for me it is about the art.
Well, I think trading is both an art and a science. Rebate trading in its pure form is really just a test of one's patience.
You guys bashing rebate trading - GET OVER IT! Trading is trading, if you are taking risk in the market (rebate traders included), you are a trader. Calling those guys, "not real traders", is immature and rather arrogant. They are bidding and offering for stock, it's called market making, or scalping in its purest definition, and it is no different than what professional equity MMs or futures locals have been doing for many years, and it isn't going away. The only difference is that recently, costs have gotten so low, partly because of ECN rebates, that the non-professional trader can now participate and make markets on their own. It is the opposite of MOMO trading, and btw has the edge in choppy and low vol markets (vice versa for the MOMO style). Now, I hesitate to draw a line and call people rebate traders, per se. We are all getting the rebate from the ECNs. In its most drastic form, some guys are bid/offering large size and spread for a penny or less. Is this a "valid" trading method? Absolutely! I don't do it personally, but I don't doubt that some of these guys make great money, and some very consistent (consistency being very important, and elusive for most traders). They will do worse when volatility increases (as MOMO does better), but there is nothing more pathetic than a guy making $4k a month calling a guy making $20k a month - "not a real trader"! Get over it, already.
The new deal is you pay 55 cents per fill (not per share). You are also charged/credited all passthroughs. The payout has been bumped up to 50% (net of costs) from the 1st dollar earned each month. BUT, all traders now have maintain a "bank" and 100% of all losses are charged to the trader. Axe
Axe, We offer both options now.No commish 35-50% and .55 (split) per trade and 50/50. The reason for this is we had great traders wanting larger payouts.These 2 deals are still by far the best prop deals available PERIOD.Furthermore banks are a small fraction of the B/P traders are given daily. Just setting the record strait.