29% gross or 65% net?

[goodscalp]

Agree this firm gives large buying power - but I never saw a
salary (If its the firm mentioned earlier in the link) - they also
don't necessarily like overnights. After all prop. firms make
most of their money on churn.

 

[EricP]

Quote from southlaketrader:

If you had to pick one, which would you pick?

1. no commissions and paid 29% of gross profits
2. .0075 cents per share commission rate and paid 65% of net


..........................................................

Which is better and under what circumstances? Is one clearly better or does it depend on the traders trading activity?

Thank you.

As others have said, it doesn't seem like a great deal either way. However, to answer your question, it's a simple math problem:

x = gross profits in cents per share

0.29x = 0.65 (x - 0.75)

=> x = 1.354 cents per share

=> If your system makes a profit of 1.354 cents per share, then both systems will give you the identical return (both will let you 'take home' 0.39 cents per share traded).

=> If your average profits are ABOVE 1.354 cents per share, then you will be better off with the 0.0075 commission 'deal'.

=> If your average profits are BELOW 1.354 cents per share, then you will be better off with zero commission 'deal'.