Regardless of the economics behind it, you shouldn't be paying more than .002, EVER, if you're doing your kind of volume and want 100% payout.
pete's right anyone doing any vol and paying over .002 is a fool and getting raped. now here's the nightmare scnerio for an llc.. the markets grinding up all day long and 90% of there traders are long running at 20-1 margin and a 9-11 type event hits the tape. bamm a crossed market and nobody gets out. the llc is toast as they're at 4-1 are 6-1.could easily happen
I guess you're running a small B/D or something ? The bigger you are, the better clearing deal you can get (and compress trades etc)
Just because they work at Bear and Goldman does not make them the "best and brightest". They have more inside information than you can imagine and some of them still can't turn a profit. Doesn't seem like they're too bright to me. I've seen guys who could barely spell S.A.T. absolutely destroy the market month in and month out. I'll take them over some guy who got into Harvard and Goldman through his family's connections.
no....you can't....but you can get in with a LLC that clears them.....Hey, im not telling anyone to say no to .003 ...if you can get it..GREAT!!..Im just telling you that the majority of firms offering this cannot and will not make money...its just a matter of time...just like when people were getting 2.5% mortgages and interest only loans and all the other sub prime B.S.....mark my words though...the hedge fund blow out will be astronomical
Ok. So I assume you ran a relatively small clearing firm and are now making the assumption that the bigger clearing firms cant hand out better deals to their customers than a relatively small firm could ? All I know is that 0.003 in this business isn't a VERY good deal at all, you can get better easily with 100% payout, so SOMETHING must be wrong in your assumptions I guess.
Just stop, you keep making yourself look like the bigger fool. Mnx, monstercat and Pete are right, you are wrong. The prop firm offers .002-.00225 to the sub LLC which then offers .003 to the trader when it comes to those volumes. Almost every cost is passed through to the trader, and then some. The prop firm pays .001 and sometimes below that, at least with NYSE. Naz is higher.
You have absolutely no idea what you're talking about. LOL, a firm charging .003 not making money. LOLOLOLOL. I guess of the last five different firms I've looked at in the past 6 weeks, all of which offered me below .003 off the bat with no negotiation on 1m shares, through four different clearing firms, all those firms are not making any money and they're trying to do me a service by naggingly trying to solicit my business. Please. This is not 1998. Times have changed. Clearing costs are extremely low, extremely. Why are you trying to spread misinformation? One of two things could be going on here. Either you've been brainwashed by the firm you're trading with into believing that their costs are so high that they giving you whatever deal they give you they're doing you a favor, when in actuality they're laughing all the way to the bank, OR you run a prop group and have traders who read this board, and thus you have to run outside and scream that the sky is green and hold green pieces of construction paper over their heads because they're looking up and starting to see blue... and if they see the blue you would actually have to provide a useful service to the world to make you're living. If your intentions are benign, then I'm sorry for my rude inferences, however you're spreading information that's simply not true - information with no basis in reality - and if it were information about, say, how you think a stock trades, or where the economy is going, I wouldn't bother to call you out, but it's misinformation that potentially takes money out of the pockets of the small guy trying to make it in this world, so if that small guy is reading this, he's gotta know the truth.
just a simple question from a future's trader! If I switch to equities, I wouldn't want to be trading more than 10k blocks since it'll get picked up as a big block and difficult to scalp and I'd choose a stock about $25 and the above combination with 5 round trips a day would generate about 1.1mil shares a month(my signal averages about 5 times a day)! How does a trader generate 5mil a month then? thanks for a proper response.