0 Commission vs Commission discussion

[WCOMtrader]

Quote from Don Bright:



There is always an exception. Let's see if anyone else out there simply trades 10,000 shares at a time....I try to respond to the "many" not the "few"... Glad it's working for you...

Don

Well, the % of the "few" that makes money is much larger than the % of the "many" that does. Not only the % is bigger, the actual absolute numbers are larger as well.

Moreover, all styles are traded better on 0 commission for the beginning trader. And as I said before, when the trader know's how he trades, than he can opt for the commission payout.

 

[esc_trader]

WCOM - Don't fret about Don. They don't trade that style over there so obviously view it as "inferior".

Now I don't do 10k shares at a time usually (maybe 5k). You would think that so much size on one trade makes you more nervous, but having the lower comms kills some of that nervousness I think.

Seriously, with scalping - it is really not that hard to gross positive (I do personally about 90-95% of days, and I don't consider myself to have any "secret" knowledge about the mkts). Netting positive more difficult, so the 0 comms/payout model I think a very valid style..

 

[AnonymousTrader]

Quote from esc_trader:

WCOM - Don't fret about Don. They don't trade that style over there so obviously view it as "inferior".

Now I don't do 10k shares at a time usually (maybe 5k). You would think that so much size on one trade makes you more nervous, but having the lower comms kills some of that nervousness I think.

Seriously, with scalping - it is really not that hard to gross positive (I do personally about 90-95% of days, and I don't consider myself to have any "secret" knowledge about the mkts). Netting positive more difficult, so the 0 comms/payout model I think a very valid style..

ESC,

I agree with u and WCOM. Moreover, I think that trading 0 commission is a much easier style. Less fluctuations in +/- days.
Overall, the skill required to trade is much lower.

Good luck to you guys!

 

[goldenarm]

Quote from WCOMtrader:


The method allows you to trade 10,000 shares at a time.

10,000 x 0.003 x 150 = + $4500
10,000 x (-0.001) x 50 = - $500

Net = $4,000

Take home = Net x Payout
$4,000 x 30% = $1,200 - Not bad, eh?

And don't tell me that this is impossible - this is my style of trading!

This is a great deal for a trader, but how the hell does the prop firm stay in business? In the above scenario, the ECN pass-thru costs ALONE would cost you $6,000 (assuming approx. $3 per 1000 shares and no rebates). Now I ain't no mathematician, but even this dimwit knows you can't make a widget for 5 cents and sell it for 2 cents and stay in business.

In your case, the prop firm would LOSE $6,000 plus $1,200 or $7,200 (plus associated desk expenses) EACH DAY! Rebates will probably cut a grand or two from the expenses. Regardless, the prop firm would be bankrupt within a month!

Are you 100% sure you're not paying ECN pass-thrus? You better double-check the fine print. Many firms offer zero commissions but you're still responsible for pass-thrus, which can add up!

Give me the name of your firm! I've got a great deal on a slightly used Brooklyn Bridge!

 

[Don Bright]

Quote from goldenarm:



This is a great deal for a trader, but how the hell does the prop firm stay in business? In the above scenario, the ECN pass-thru costs ALONE would cost you $6,000 (assuming approx. $3 per 1000 shares and no rebates). Now I ain't no mathematician, but even this dimwit knows you can't make a widget for 5 cents and sell it for 2 cents and stay in business.

In your case, the prop firm would LOSE $6,000 plus $1,200 or $7,200 (plus associated desk expenses) EACH DAY! Rebates will probably cut a grand or two from the expenses. Regardless, the prop firm would be bankrupt within a month!

Are you 100% sure you're not paying ECN pass-thrus? You better double-check the fine print. Many firms offer zero commissions but you're still responsible for pass-thrus, which can add up!

Give me the name of your firm! I've got a great deal on a slightly used Brooklyn Bridge!

Good points, as always. Every trading arrangement that I have ever seen (and most business ventures of any sort) only last if it works for both sides. Traders need capital to trade, firms need to show stability to provide capital and avoid the nightmares we are seeing over and over on the Street. Whenever 1 side or the other is trying to outsmart or screw over each other, then both will likely fail. With rates coming down, the profits for the Firms' come down with a 100 Delta, and thus the rules must sometimed be changed to adapt.

Those that don't 'adapt' won't make it, period (trader or firm).

Try to see the other side of your partnership, play fair, and hopefully everyone will be here "on the other side." (I know we will, and I hope the other couple of firms will be as well). And I certainly hope the traders get back on the program and start adapting and making money. The "naysayers" and complainers just drag down the others like a cancerous growth.

The prosperous traders and Firms will survive as they have for decades.

So back to the original point of the post. "Do whatever works best for you and your Firm"....

or (comic relief) ("Ask not what your Firm can do for, ask what you can do for your Firm")....

Just make money damnit!! Then all is well!

Don

 

[WCOMtrader]

Quote from goldenarm:



This is a great deal for a trader, but how the hell does the prop firm stay in business? In the above scenario, the ECN pass-thru costs ALONE would cost you $6,000 (assuming approx. $3 per 1000 shares and no rebates). Now I ain't no mathematician, but even this dimwit knows you can't make a widget for 5 cents and sell it for 2 cents and stay in business.

In your case, the prop firm would LOSE $6,000 plus $1,200 or $7,200 (plus associated desk expenses) EACH DAY! Rebates will probably cut a grand or two from the expenses. Regardless, the prop firm would be bankrupt within a month!

Are you 100% sure you're not paying ECN pass-thrus? You better double-check the fine print. Many firms offer zero commissions but you're still responsible for pass-thrus, which can add up!

Give me the name of your firm! I've got a great deal on a slightly used Brooklyn Bridge!

Well, since you have counted very well, you may very well know the answer, and it is even silly of you to ask.

Of course you are responsible for ECN fees. HOWEVER, you get rebates as well, and full rebates mind you.

Further explanation is pointless, as you have clearly displayed your narrow-mindness. And I really do hope that you are a trader.

As far as the brooklyn bridge goes, I will personally take you up on that offer, I will write up a contract and we will go from there.
The Capital to back the proposal I have secured.

The firm that I am with is doing very well, expanding too. And expanding WITHOUT charging people commission or taking up capital - not really going out of business.

But, I do hope that you remain a trader as long as possible. More of you in the market is what we need!

Good Luck!

 

[goldenarm]

Hey, no need to get defensive! I'm just stating the facts!

You implied there were no transaction charges from your example and I'm just educating our readers that this is bullshit. Once you start taking liquidity, then your commission model falls apart and reality sets in!

So for the time being, enjoy trading shit like WCOM. When rebates are discontinued you'll be looking for work at Burger King!

 

[bigbeech]

ya know, the pikers trading 5-10K lots for a penny or two that have the zero commission plans are keeping a lot of our favorite stocks in lame super narrow ranges, and thats no fun

 

[AnonymousTrader]

Quote from goldenarm:

Hey, no need to get defensive! I'm just stating the facts!

You implied there were no transaction charges from your example and I'm just educating our readers that this is bullshit. Once you start taking liquidity, then your commission model falls apart and reality sets in!

So for the time being, enjoy trading shit like WCOM. When rebates are discontinued you'll be looking for work at Burger King!

I bet WCOMtrader will own Burger King by the time rebates are discontinuted. And not an establishment, the whole flipping franchise.

Moreover, it does not look like that's going to happen anytime soon.

Also, goldoffarm, you are not educating anyone about anything - because obviously you heard something somewhere, but nowhere near the truth. People trade the market to make money - not to show off styles. If I trade a stock using solar eclipses and penguin mating patterns and consistantly make 6 figures, while you are charting and calculating retracements and using pivot points and barely breaking even - my approach is better.

And I know that the approach WCOMtrader has described works phenominally well. Just don't be jelous.

And he did not leave anything out: rebates and fees are counted into the net. The skill in trading comes from knowing how to manage and use them.

So you badmouth all you want, and I am also waiting to see how that Brooklyn Bridge goes. I am willing to pick up half the tab, if WCOM lets me.

So goldjackarmoff, or whoever you are - just trade and don't talk like an expert about stuff where the milk hasn't dried off your lips yet.

 

[AnonymousTrader]

Quote from bigbeech:

ya know, the pikers trading 5-10K lots for a penny or two that have the zero commission plans are keeping a lot of our favorite stocks in lame super narrow ranges, and thats no fun

Hey - what do you think - it should be easy? Some traders make money others loose. Survival of the fittest, no?

Maybe you should join my study on eclipses and penguins, as I mentioned above ? (j/k)

But seriously, you make money any [legal] way possible. 0 Commisison gives you that opportunity, while obviously at the expense of other traders. But hey, that's how you make money!

Good luck trading Bigbeech, sincerely!