What additional fees other than platform do I need to inquire about when trading with an arcade? SEC? and others? thanks
Minimum monthly trading quotas/fees. Some may not charge anything but I've seen them running as high as $2,000 a month (not including desk/equipm/quotes). That can be another few hundred, again depending on firm. You need to ask if there are any other fees not disclosed upfront.
Watch for mark ups on ECN fees. Go to all the exchanges websites every month and check the fees; when fees are raised or lowered, you want to make sure it's accurately updated in your favor. Go through the tag on every fill and make sure it's proper. You can't really know until you open the account, but when you do, go through the clearing report line-by-line, execution-by-execution, to make sure everything is legit. Are you getting .24 rebate for posting BATS? Did you get a charge, instead of a credit, for a resting order? What happens is 95% of traders aren't aware of what the real fees are, and will foolishly get screwed over. If you catch a "glitch" in the clearing, they will say "oops" and fix it (at least for your account.......). The glitches are never in your favor and always against you. Any kind of "other" fee as well... a firm can offer $1/1000 and then charge a $.30/1000 "other" fee, and call it whatever they want. Now your ticket is actually $1.30/1000 instead of $1.00. NASD, NSCC, TAF, SEC, and ECN fees... know what they are and make sure they're correct. My mentor said that being a trader also entails being your own accountant. He's very much right. I would say pretty much everybody will try to play games, no matter how great of a salesman the firm's owner is, or how reputable or old the shop is, you have to be on top of them OR THEY WILL GET YOU.
I agree with Mr. Scalper - every trader should take the time to check their sheets daily and ask about every fee they are unsure of. Sometimes mistakes happen between the firm and clearing firm, you never know. Full disclosure, and all the facts. Be aware that you may run into "tiers" with some of the fees and rebates based on who you clear with etc. Traders must be accountants, researchers, (self) psychologists, LOL and a gamut of other professions - as "entrepreneurs." Don
If you wouldn't mind, I'd like to paste this quote in a different message board forum. The board is not stock based but it is more or less a think tank of millionaires and those who want to be millionaires.
A sneaky one I've seen is rounding to nearest cent (or tenth of a cent) for some of the fractional cent fees. I believe that e.g. the SEC fee is to be calculated to 5 decimal points and added up over a month; but I've seen it rounded up to 1c or 1/10th of a cent on every single trade. For a friend this amounted to 10k+ in "rounding fees" monthly.