Very good points caliber and you are right....MARGINS have become the name of the game now for most firms....what good doe sit do for a firm to trade 50,000 tickets a month if they are only clearing 50 cents profit per ticket?..the volume is no longer there to support the thin profit margin ...there is going to be real carnage in our industry by the end of the year unless the voluem picks up dramatically
It is hard to complain when rates get down to <.004 + ECNs. If they bottom out there that's OK, would be nice if they stayed there too. I am suspicious of any firm that offers .0035 all in tho, it seems irresponsible. I can just trade ARCA route out (.004 cost) and the firm will lose money. Don't think I want to trade with a firm that would take on that kind of risk for themselves. By the way, Knight Trading reported .0015 avg revenue per share. Even they would be losing money at .0035!! What do you guys gross per share?
i think when we're talking about .0035 all in, most people are talking about listed rates, ie: "true base" is around .002 + "listed charge of .0015 = .0035. therefore if you did nasdaq arca remove it'd be .002+.004= .006
You're 100% right. Margins have to be sufficient to offset the risk of this business. If you think there's no risk you're a fool. Four major pro-trading firms that have gone bankrupt in recent years, in addition to scores of smaller operations. Firms that charge reasonable rates (1/2-3/4 cent) are firms that will survive and generate enough revenue to reinvest in their infrastructure and strategy development. With other firm's you're on your own. And that may be sufficient in the short-term for traders who can get by on their own with average technology and no assistance.
last year i traded 22 million shares of stock. @ a penny a share that is $220,000. @ half a cent a share i have an extra $100k. commissions definitely make a difference. i dont care who u are or how much $ you pull out of the market a $100k is a lot to just give away. especially since you would be just giving it to the firm. to argue that commissions dont make a difference is absurd. i pay less than half a cent if u pay a penny i can front your ass all day. im giving you your fill.
On PAPER you are correct....But unfortunately it doesn't necessarily work that way.....low commissions are definitely very important but your trading probably would have been different as well, don't you think?....also, one thing I have noticed is that all the commission rates are basically the same....some firms charge .075 -1.0 per share and include Isld, Arca and soes.....other firms charge .05 per share but you have to pay for isld, arca, soes ect.......What i would like to know is what firm has the BEST ALL IN rate per ECN... that would probably be more reflective of your true costs then the per share commission only.
good open taking the rest of the day off. last year the 22 million was @ a penny a share so my volume would have been more not less if i was paying a half a cent. this year im at about 4 million a month. i use ecns sometimes however i trade primarily listed stocks. id say roughly 85% of my trades go to the floor.
if it's all listed thatis not that bad of price...is that the price regardless of where it's executed? if it 's 1.o per share executed on a third market it's a little high but if its on the NYSE you are in pretty good shape.