if you have one trade with 100,000 shares and get 0.8 of a cent how much will you get net at don bright?
Many of their traders are not interested in moving to the US to join another prop firm. THere are numerous prop firms in the US from which they may decide to investigate. It is very unrealistic to believe that ST will be shut down.....if anything the hedge fund may be, since this is the division of the firm that did these wash trades (Another thing the press articles are unclear about). The Prop. division is very unlikely to be affected by any of this. You know it must be a slow day for news when on CNBC (where I first saw it) reports that Swift Trade illegaly made 19 grand.....breaking news.....Nick Leeson took a 24 minute crap today and reports say it was rather stinky...... The media talks about stupid stuff ALL the time
I spent a week in Swift Trades Toronto office in March, the place seemed like a morgue. They have 2 entire floors, one of which had NO ONE trading, no one at all. The traders I talked to were sick and tired of no competition and high commissions. Also, I can tell you from my personal experience, their computers, ISP, etc. are a joke. The T1 connections broke down at least 3 or 4 times a day, everyday I was there. Amazing.
I have also heard about ST's execution system problems....crashes, etc. THis must be a huge pain in the ass. BUt their prop traders dont pay commissions, so you must be referring to the few remaining client traders. I actually was there myself last winter (Toronto office) briefly and, yes it was quite empty. A friend of mine is in prop training there currently, and another just finished training. They were/are in training classes of 10+ traders, respectively....so it seems they are taking in big classes of prop traders
SilverBullet, I'm a bit surprised that you are/were a prop trader at Swift and don't know about IB, don't know about Bright's presence in Canada, and don't know about something called remote trading (Bright and Echo among many). Are all prop traders at Swift so ill informed? If so, that would explain a lot. There is no financial reason why a profitable prop trader would remain with Swift. A 30% payout simply does not compare to an opportunity to trade for yourself. The ECN passthrough fees that they are currently paying would be very similar to IB or Bright or Echo's all inclusive 1 cent/share commissions. And less when you factor in the rebate given to provide liquidity. So I guess they must love the Swift Trade crash prone system, low quality ISP and high commissions/low payout. Yeah, must be that.
Alright Babak,. lets clear some things up here.... Yeah you're right, Ive never heard of something called 'remote trading' .......... considering I did it for some time. No I didnt know about Bright, but then again, they are not in toronto and have only 1 Cdn branch. The 1 cent commissions/share commissions would just not work out well to the style many of ST traders....lets have a math lesson.... ST Trader trading (per day) 600,000 shares (low) = $6,000 at one cent/share 1,000,000 shares (average) = $10,000 at one cent/share 2,000,000 + shares (high) = $20,000+ at one cent/share Now let me give you an idea of passthroughs at ST.... Normally, traders that trade for gross pay about 10-20% of their gross in passthrough fees. ST Trader grossing (per day at 15%) $1,500 (low) pays $225 netting $1,275 $3,000 (average) pays $550 netting $2,450 $4,500 (high) pays $675 netting $3,825 This high figure is conservative as grosses reach over 7 or 8 k rather often for some traders. Many traders will also earn a couple grand gross per day, and have a grand or two in negative passthroughs (liquidity credits) to reach similar (or higher) net numbers. 30% of the numbers just above is: low $382.50 average $735 high $1,147.50 Now, in order to net this highest amount with a one cent commission based on ST volumes (which also allows for sometimes massive negative passthroughs) the trader must gross $13,825 (at 1 million shares), or even more - $23,825 (at 2 million shares) since a high gross number at ST usually requires this sort of volume. So now you can see why the one cent a share thing is just unbelievable to ST traders, SO expensive. ST traders get very pissed when they accidentally hit ATTN and pay retail since it costs $9/1000 shares for ST. This is less than one cent a share, and it seems astronomically expensive. To gross $20,000+ at any firm day trading would require a phenomenal amount of buying power and capital tied up. Aimagine losing 10k in a day. Ouch.
I agree with silverbullet a penny per share is a bit too high, especially with that type of volume. My group doesn't charge commissions, we absorb the costs so our traders can net more. We don't want to churn them, we feel they should be able to earn a living. I don't know much about ST, but I would love to learn more about their prop model if it can help make my traders more profitable.