Commission-free

J

joethemoustache

First of all: this is not an ad or anything.

What strategies could work with commission-free trading? The reason I ask is that a Swedish broker offer retail clients one select stock a month, which they can trade with no comission. Off course you still have slippage. The stocks are generally low volatility stocks with ok liquidity for a small player. I suppose the reason they do this apart from marketing reasons is to up their market share in statistics and try to induct daytrading behaviour in swing trading clients.

So I wonder if anyone have opinions on how to make the most of this.

1. Does saving on commissions only improve your bottom line but the strategy should be no different.

2. Are there especially commission-sensitive short term strategies which would be worth trying/ backtesting on these stocks (like scalping volatility-based channels or others)?

Normally I swing trade futures (OMX) and occasionally daytrade around the position. I am about to do some more research on this issue to see if daytrading this way could be an option but would be very glad for any opinions/ suggestions.

Thanks/ Joetm


5-day charts of the stocks for Feb and March (1 USD ca 8 SEK):
 

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but I'd stay away from this "deal."

Unless this particular deal happens to fit nicely with one of your pre-existing methodologies, it seems kind of crazy to take aim at particular stocks simply to save on commission.

I'd worry about refining your rules for your existing trading methodologies before trying to create strategies around stocks that will change every month.

Just my 2 cents. Best of luck.
 
Yeah, I suppose you´re right, I was kind of thinking of these stocks as a way to test out new waters in a cheap way, keeping costs down. Although Im still wondering if anyone has a gem hidden which they discarded merely because commissions made the strategy un-profitable. Thanks anyhow.




Quote from Lightningsmurf:

but I'd stay away from this "deal."

Unless this particular deal happens to fit nicely with one of your pre-existing methodologies, it seems kind of crazy to take aim at particular stocks simply to save on commission.

I'd worry about refining your rules for your existing trading methodologies before trying to create strategies around stocks that will change every month.

Just my 2 cents. Best of luck.
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Commissions here in the U.S. can be much less than the slippage on low volume stocks. I think only a scalping strategy on higher volume stocks would payoff from zero commissions.
 
Quote from joethemoustache:

I suppose the reason they do this apart from marketing reasons is to up their market share in statistics and try to induct daytrading behaviour in swing trading clients.
More...
The probable reason is that they own inventory of whatever stock they're touting each month and knowing it's easier to market to their customer base, and wishing to have their customers supply them with profits, they have given you an incentive to do so.
 
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