30% payout w/ no comm

Quote from wefundhms:

A prop firm is offering 150k buying power, no comm, and 30 % payout. Also 5 year non- compete. What do you think?
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Do you have to bring in capital?
 
If I have the capital over 25k would it be wise to trade with 0.5 cents per share plus ECN fees? Retail account ofcourse.

Agras
 
No cap down and none of that BS non-compete agreement, I would take that deal right now.

But who knows when times will change and that 30% payout, no commish will become a rip off.
 
Ive been reading these comments and I have to agree with everyone......this sounds more like an 'order desk' or a market making firm ....what you just presented was the same thing we use to give our traders on a market making desk ......in 1997!!!

is this a daytrading shop or an orderdesk/ECN or Market making desk????
 
This is offer from a firm where I trade, unless someone is copying the deal exactly to the T.

The contract is a new thing now - and it was a result of several events that happened. I also know that the contract applies if they teach you their style and you take the 0 commission deal.


Otherwise, I'm not going to say much but if you are an experienced trader you should be able to figure out what 30% with no commission is compared to 80% with commission.
If your net/share ratio is high - then go with a higher payout.

What I do know is that they offer higher payouts with commission - if you choose. (the commission I beleive is .3 of a share - however I may be wrong on this one).

Most importantly I know of a lot of traders who make a lot of money who would've been negative if they paid commission (myself included). But that is a specific style of trading.

However all traders should look at this simple thing and then decide:

Your Gross.
- Commissions
- ECN Fees
+ ECN Rebates
= Net
Net x YOUR PAYOUT% = CP (commissioned payout)

Then:
Your Gross
-ECN Fees
+ECN Rebates

Net x 30% = NCP (non commissioned payout)

then look whether CP>NCP

I know a lot of traders have Gross + and Net Negative because of commissions. In that case 100% of a neg. number is smaller than 1% of a positive one.

However, many good experienced traders know that their commissions are only a tiny part of their Gross - so they will go to a higher payout (Obviously). Unfortunately, I'm not one of those - but I do know a lot of those people

Its a matter of your trading ability.

But you cannot compare 30% to 80% directly without knowing how much commission are you paying.

Just plug numbers into the formula on top and you will have your answer!
 
If you have money to fund a prop account, you can get a low commission rate AND a full 100% payout. Why give any of your profits away?

Volume
 
Hmmmmmmmn,


This sounds oddly familiar. I won't mention any names, but it sounds like this firm is one of those liquidity trading firms.

Any guesses?
 
Here is a simpler solution.

In fact, I think this will be a good excersize for all traders.

Attached is an excel spreadsheet that calculates which commission vs payout is better.

Plug in your numbers. See what you get.
 

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