Reasonable commission rate????

Discussion in 'Prop Firms' started by sunyata, Oct 8, 2008.

  1. sunyata


    Hey everyone,

    I received an offer to trade remotely at .0045/share with 100% payout. I have been trading for a year and half with this firm but in its office, so have (sort of) a relationship with the manager, in that he recognizes I can control risk effectively. I trade roughly 1.25M shares a month, maybe a little more and have put up $5K.

    Do you think this is a reasonable deal? I feel that .0035 would be more reasonable, but truthfully my judgment is based on what I "feel" to be a fair price, rather than on hard numbers as to the firm's cost structure and profit per share.

    Thanks for everyone's input!
  2. sunyata


    Also, I have $500K BP at my disposal, which is significant for the amount I put up I believe.
  3. how much do you pay a month?
  4. sunyata


    I'm not quite sure what you mean. At $.0045/share and trading 1.25M shares, I would pay in $6,750 in commissions, plus ECN pass-throughs, which add up to an extra $.00175/share about.

    I think that $.0035/share would be a more fair rate. Maybe I am being too greedy though.


  5. Mecro


    Check for monthly fees such as OpenBook, Nasdaq data, software fee, chart fee, etc.

    I would push for .003/share, .0045/share is steep unless it's all inclusive, as in truly all inclusive taking in account ECNs & monthly fees.
  6. sunyata


    I felt that .0045/share was steep too. The data fees would be standard professional rate, since I would be designated a "professional trader", adding up to about $180/month for NYSE and Nasdaq. There are no software fees and I would pay for eSignal myself.

    I have found that the only firms that charge less commissions are those that try to circumvent registration with the SEC. I guess the extra cost of FINRA membership, plus sponsoring traders, is added onto their per share price. However, I don't think these costs amount to an extra .0025/share. This is why I wish I was more informed of the cost structure of these firms.