or how bout this..... you wash them window's on my mercedes....and I will give you a 2-dolla bill, whether you like it or not. Think about it before you reply. Michael B.
CRITICAL!!! leveraged firms (formerly called Prop Shops..) never want this kinda talk heard... too badd..... Critical, the cost of transactions... It makes all the difference between staying in the game, jumping up and down on a win and feeling relieved when bailing out of a bad position.... The cost of transactions is a critical component to the equation...right behind the direct access software and the technical support of the clearing agent's servers....
Esc: You're completely missing the point. Low rates don't make you money. They SAVE you money. Rates can drop to zero but it won't help you. Because once that happens competition and holding periods will adjust to offset the cost savings. The entire reason I started this thread was to make price-fixated traders realize that the present isn't anywhere as important as the future. Sacrificing a real strategic or technological edge to save 1/10-2/10 cent may pay off in the short run, but in the long run it's a loser's game for most. Most people on this thread are hoping that firm owners see their cries for lower rates and adjust downward accordingly. That's why many are so against admitting that they'd pay more for the ability to make more. The fact is, rates are near a bottom so you better get used to relying on your skills to make money, instead of hoping to find another firm with lower rates. The nutshell of it all is this. Assuming your rates are reasonable--speed, support, and strategy are ALL that matter. There are VERY few firms that offer a Ferrari-like trading platform, but there's a ton that offer a Ford Focus platform at rock-bottom rates. You pick the car you want to drive in the Indy 500 and pay accordingly.
well said maxgain, more traders should continue to focus on what makes them money - their skill and strategy. Pete
Exactly. Andover got into a pricing war with other prop firms to boost up their volume so they can sell. Now that Sungard is in there, they're going to adjust prices to where they make financial sense, not where traders want them. Rates aren't going lower, if anything they'll just stabilize and stay where they are, but for those hoping that they will be paying 2/10 all in, it is not happening. The market is slowly shaking out the unstable day trader. Within the next year, 75% of the day traders will be out. The only thing that has helped these traders are lower rates, not sound strategies. Tack on the new SEC fee, and that year could easily become 6 months.
You might be true about Andover's strategy to sell out, but they are still very aggressive in rates, I know several people trading there for .0035-.0045, all-in; using what some people claim to be is better software, the Hammer. I've been around several firms and the transparency just isn't there unless you dig into this business, you can pay less and get more. or you can pay more and get less. Rates are still headed lower, just look at the new pricing that Etrade pro is coming out with, and this is AFTER they bought out Tradescape (which probably did the exact same strategy you claim andover did: offer low rates to boost volume prior to selling out). Genesis is offerring ridiculous commission rates and several of the self-clearing firms are continuing to lower costs and their 'product' is still improving. Clearing costs are in a major bear market, spreads are miniscule, absolute stock prices are much lower, this all adds up to fundamental forces which would tell you that the existing commission structure is still way too high and is going to continue MUCH LOWER. Untill you see a bottom in the exodus of traders out of this business (declining demand) there will not be a bottom in commission rates. The world is just getting to be a more competetive place. Just as traders need to improve and many will get weeded out in the coming months/years, so will LLCs and brokerage firms, software/data vendors. To stay in the business as a trader you have to be working on all aspects of your 'business': maximizing revenues (strategy, emotional control, execution) and minimizing costs (commissions, slippage, decision support costs)
The rates are still low cause the firms want to keep some of their more consistent traders, and those low rates are offset by the higher one's charged to other's within the firm. But, I gaurantee that once everyone at Andover starts demanding those .0035 - .0045 all in rates, Sungard will crack down on those rates quick. It's starting to happen across the industry. Alot of the prop firms are sending away traders demanding the lower rates cause it just doesn't make financial sense to take the high risk of having one of them blow them up cause the low margins can't cover it. Look at it this way, if only two firms were left to provide us with a platform, they would start raising prices, cause they would be a duopoly. The elimination of these smaller firms isn't good in the long run, cause the competition won't be there to keep rates going down or at their current level.
If i am paying .005 per share at a firm that is not selfclearing why isn't it possible to get the .0035 or .0045 from a selfclearing firm. And people mentioning about what you prefer lower rate or good quality of support and software i wonder how often you actually do call in for support and also what's the big difference among the major trading softwares. thanks,