Bigs, Take the numbers for Swifttrade guys and do the math. You'll find that some guys who make a good living trading under the Swifttrade model would get crushed trading under the Quest deal. However, some guys could improve their income dramatically. Not without risk, but hey....risk/reward is what trading is all about! These are different deals who cares! Trading at Swifttrade has risks and costs. Since props at Swift only get 30% of their net profit I would say that they pay a price for this received riskless trading. You can think of it as either your commission on every winning trade is 70% of the profit (without any way to mitigate it, the bigger the win the more Peter Beck makes), or or you don't pay commission but, you pay a hell of a lot of interest to use Swifttrade's money (and the better you do the more they want in interest). I'm not going to turn this into a Quest vs. Swift battle and quite frankly the two are very different cost models. Suffice it to say that I think both firms could have very successful prop. programs. It's just a matter of having the right traders in the right places.
What is the deal with 7% GST? How and when do you extract them? Say, I make money 6 months in a row, lose money within the next 6 months, broke even for the year. Does it mean that I have to pay GST during the first 6 months or is it calculated on a year's basis?
GST is added to when the trader wants to take out some of the trading profits accumulated in the trading account. Say there were profits of $10,000 accumulated. You would submit an invoice to Questrade and include the 7% GST in the $10,000. When tax time rolled around you could claim the GST as an expense. I again stress that you speak with an accountant on this issue as we cannot give you tax advice.
GST becomes an issue when you want to take trading profits out of the account. Once a payment is made to the trader, the trader is responsible for GST only on that amount not on any other balance built up in the trading account.
So the trader would invoice Questrade for the GST on the withdrawal eg). -Trader wants to remove $1000 in accumulated profit, invoices Questrade $1000 + GST = $1070 -$1000 would come out of traders profit as a consulting fee, trader would charge Quest GST and then be responsible for remitting that GST. -$1000 equity would be removed from the traders's account but not the $70 GST. That would be paid by Quest. Is this a correct example?
On the other hand... 1. $25 per stock fee every day - better than $1000 in commissions Depends how many stocks you trade. Trade 3 names a day and it's peanuts. Trade 15+ symbols in a day and $25 per name is ridiculous. 2. You pay 7% GST on all your profits - everybody pays taxes, my understanding some of this can be deductable. Yeah but NOBODY pays SALES tax on their trading profits--on top of income tax. That's just plain stupid; regardless of whether a portion can be written off. One related question: Since Quest traders are "consultants" do they have to pay the employers share of payroll taxes? 3. NYSE trades are 1/2 cent per share extra - Leave the NYSE trading to those who really make the $ there, the specialists! You don't know much about listed trading eh? 4. Some of the ECN pass-throughs are marked up - The rates that they charge for INCA, ISLD, ARCA are the same that the ECNs charge/rebate. NO Markup! The Questrade website lists ARCA at .005 and INCA at .005. Those are both marked up. 5. You must make a subordinated loan to open an account and your funds are not covered by CIPF - Prop firm funds not guaranteed either. You want a guarantee? trade retail. Why trade non-retail at Quest if you're only going to get 4-1 margin?????? 6. Seat fees - Understandable, they don't need you sitting there using their bandwidth for free of you are not trading. Very common in almost all prop firms. This waived pretty easily. What happens if a trader takes a 2 week vacation? 7. $5 per day admin. fee - Give me a break! Better than an extra $800/day in comms. Extra charges suck. Build it into the commission. 8. CyberTrader and Laser are average platforms at best - Matter of opinion. What is an above average platform? There is one platform out there that can do what no other software can. Hopefully the masses never find out about it. 9. No overnight positions - That's why they call it DAYtrading! Is DAYtrading the only way to make money? Is it NEVER right to hold overnight? 10. Professional margin??? - Finally a legitimate concern! [/B][/QUOTE] ...and a huge factor for most pros.
I guess Questrade won't be squeezing a nickle's worth of commission out of you will they? Not even a Canadian nickle !!!(that's about 2.35 cents U.S.)