Are these market data fees competitive?

G

gianfrancoB

Hey guys,

a prop firm is charging me the following on a monthly basis
$80 risk management fee (atg prop report)
$225 software fee (fusion platform)
$100 software (which I'm told is the access to SPY and QQQ I requested)

Im trading strictly equities. No futures or options.

Also being charged $4.5 per 1000 share. My volume is roughly 100k-200k (I just started trading in January 2015 so my volume is low)

Is this about right? I just want to make sure Its a competitive rate compared to other prop firms.

Thanks and look forward to input
 
gianfrancoB said:
Hey guys,

a prop firm is charging me the following on a monthly basis
$80 risk management fee (atg prop report)
$225 software fee (fusion platform)
$100 software (which I'm told is the access to SPY and QQQ I requested)

Im trading strictly equities. No futures or options.

Also being charged $4.5 per 1000 share. My volume is roughly 100k-200k (I just started trading in January 2015 so my volume is low)

Is this about right? I just want to make sure Its a competitive rate compared to other prop firms.

Thanks and look forward to input
More...

The $225 and $80 are made up fees ....they own the software and no one charges their traders for prop reports. 100k to 200k shares a month is pretty low so the firm does need to make some money somewhere. What is your payout ?
 
eusdaiki said:
are you allowed to carry overnights?
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I'm not allowed to carry overnight yet. They want to see me be a consistent trader first. Also I'm told they will leverage me about 4 to 1 overnight when i do start carrying overnight.

murotrading said:
The $225 and $80 are made up fees ....they own the software and no one charges their traders for prop reports. 100k to 200k shares a month is pretty low so the firm does need to make some money somewhere. What is your payout ?
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So most prop firms don't charge these fees at all? What are common fees and at what rate ? The payout is 90/10.

Thank you
 
gianfrancoB said:
I'm not allowed to carry overnight yet. They want to see me be a consistent trader first. Also I'm told they will leverage me about 4 to 1 overnight when i do start carrying overnight.



So most prop firms don't charge these fees at all? What are common fees and at what rate ? The payout is 90/10.

Thank you
More...
Just negotiate a monthly volume minimum of around 300k shares a month with no software fees just market data. If you trade under 300k agree to pay the 225 but if you trade over 300k shares you don't pay for software.
 
I am getting all my fees paid if I do the volume required by my Brokerage, I generate enough commissions to cover my data fees of $400 each month for incredible software.


They charge $0.03 for Taking while Posting gives you a -$0.022 to $0.023, usually I don't pay ECN fees and get rebates on 99% of my trades. I think those fees are not outrageous and if your putting up $100k to $500k I would demand they pay for all your data fees of your doing lots of trades.


Make sure your in control because they need us, we don't need anyone more than they need us. You can get them to reduce your per-share fee down to $.015 if your doing lots of volume and don't mind paying ECN fees or patiently waiting for stocks to come to you and getting rebates of $.022 or $0.025 with some ECNs, I heard there a higher rate but can't track it down. If they paying for the ECN fees with a Smart Router than $.04 is great, if you have to pay $.04 plus ECN fees for taking, it's a bit high.

Do those fees include taking liquidity? Are you getting the top rates from ARCA, EDGX, EDGA, BATS and Nasdaq?

Most importantly, don't jump at the first offer because there are great people on Elite Trader with ties to the Industry and they will meet or beat any offers your getting. That's how I found a few of my Brokers, it's through Elite Trader's great network of people here. We don't have all the posers running around here because our Moderator would boot them off this site, that's what I love about our Community here!


A thought before I stop, there firms that charge a good flat-rate and allow you to make money off ECN Scalping, check those out too!
 
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JesseJamesFinn said:
I am getting all my fees paid if I do the volume required by my Brokerage, I generate enough commissions to cover my data fees of $400 each month for incredible software.


They charge $0.03 for Taking while Posting gives you a -$0.022 to $0.023, usually I don't pay ECN fees and get rebates on 99% of my trades. I think those fees are not outrageous and if your putting up $100k to $500k I would demand they pay for all your data fees of your doing lots of trades.


Make sure your in control because they need us, we don't need anyone more than they need us. You can get them to reduce your per-share fee down to $.015 if your doing lots of volume and don't mind paying ECN fees or patiently waiting for stocks to come to you and getting rebates of $.022 or $0.025 with some ECNs, I heard there a higher rate but can't track it down. If they paying for the ECN fees with a Smart Router than $.04 is great, if you have to pay $.04 plus ECN fees for taking, it's a bit high.

Do those fees include taking liquidity? Are you getting the top rates from ARCA, EDGX, EDGA, BATS and Nasdaq?

Most importantly, don't jump at the first offer because there are great people on Elite Trader with ties to the Industry and they will meet or beat any offers your getting. That's how I found a few of my Brokers, it's through Elite Trader's great network of people here. We don't have all the posers running around here because our Moderator would boot them off this site, that's what I love about our Community here!


A thought before I stop, there firms that charge a good flat-rate and allow you to make money off ECN Scalping, check those out too!
More...

These fees don't include ECN fees or rebates. I almost always trade with market orders and not limit orders. Im not sure if Im getting top rebates. On average its about $3 per 1k to remove liquidity and $2 in rebate for adding.

I put up far far less capital with BP of 250k.

Thank you for the information, very insightful. So doing 100-200k shares a month, does $4.5 per 1k sound fair enough?
 
gianfrancoB said:
These fees don't include ECN fees or rebates. I almost always trade with market orders and not limit orders. Im not sure if Im getting top rebates. On average its about $3 per 1k to remove liquidity and $2 in rebate for adding.

I put up far far less capital with BP of 250k.

Thank you for the information, very insightful. So doing 100-200k shares a month, does $4.5 per 1k sound fair enough?
More...


The phrase "fair enough" is subjective if you're not familiar with what others pay for the same service. So let's just take what you're paying and see if you think it's "fair."

Take the average of your monthly shares, lets' say it's around 150k.
.0045/thousand on those shares, so multiply .0045 by 150,000.

Your partial variable costs on 150k are $675, just in commission.

But wait! Now you have other variable costs on those 150k shares, which are the ECN fees for adding/removing liquidity. You claim it costs you $3 per 1k to remove, and you are mostly doing market orders, which means you are mostly removing.

So now ADD the $3 per 1k to your 150k shares, and you get:

.003 x 150,000 = $450.

So take the $675 in your fixed commission and add the $450 ECN removals: $1,125

But wait! We're not done. Now you must add your fixed costs, which you have listed as follows per month:

$225 for Fusion
$80 for prop reports
$100 for data (QQQ and SPY)

Total monthly fixed costs: $405
Total monthly variable costs: $1,125

Total fees: $1,530

Multiply it by your twelve month lock up, and that is your total 1st year cost.

If you're getting 250k bp, then my guess is you are at either 10x or 20x your capital contribution, meaning you've put up a max of 25k, and a minimum of around $12,500.

Looking at it objectively, the fixed costs are high, the variable costs are high, and on top of that you're only keeping 90%, which means if you keep trading with those fees at the same rate with the same shares, you will require 20k in profits to reach your breakeven point the first year.

So unless your profits trading the 100k-200k shares a month far exceed the costs, you have a "commission churner and burner" account. Great for the firm, not so great for you.
 
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And just to follow up, if you trade 150k shares a month on average, and a current cost of around $1,500 to trade them, it means you require just one penny net on those shares to breakeven for the month. If you start to add liquidity on those shares, then you can accelerate your equity curve by immediately reducing your variable costs, even though you have high fixed costs for software and other fees.
 
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