Quote from john12:
I think its wrong as heck for et to allow advertising prop houses to sit here and recruit.I assure you with the sterling software platform this prop firm is paying max 50 cents /1000 shares and charging $3-$5/1000 . all they're really doing is providing $30-$50k loans per account to get guys with $5-$10k down to $200k buying power. they have little to no risk and can overide 300-500% per trade. so lets say jack blow trades 1 million shares a month. jack blow pays $3-$5 k commissions per month of which this prop firm makes $2500-$4k per month in overides. this is just a staggering sum of money`. so in essence for a 50k loan they're making 100% a year profit. multiply that by 50-100 traders andyou're talking $2.5-$5 mil a year in overides. a sharp negotiating retail trader can get $1.50/1000 with sterling threw many vendors for 1 mil shares.i don't blame prop houses for doing this but traders are fools for not shopping hard.
no noob will do 1,000,000 shares a month. i wrote in another thread that there are too many people running around talking about deals for noobs. This deal is not the .0015 you mention, but a good example is goldie. you can't get a 75, .0002 as a noob. don't believe me? go talk to rob, tell him you've never traded, and see how far you get.
besides that, a lot of traders flat out make more on a .004 100. as a general rule, the biggest, most profitable traders i ever met paid higher commish, every single time. why is that? because a profitable trader with a higher commish needs to have a higher ticket ave (ave profit per share) then a little punter trading on a .0000000nothing who doesn't have an incentive, or a requirement, to have a bigger pnl swing. you don't know anybody on a .0002 with a 20-50k intraday pnl swing. guys paying .002-.004, are the few i've seen do it with this rate. never met a little .0002 scalper do this, and consequently, weren't the most profitable.
a lot of people actually make more on a .004 100 then .0002 75. and a .0015 100, again, you would need some type of experience/theres a catch like min vol.
bottom line is if you're brand new, there isn't any reason you why you wouldn't get a shit .0002 deal (with a retarded split) or .004-.007. EVERYBODY pays there dues one way or another. Nobody just started out on the best deal. and yet, thats all noobs want to talk about, getting the best deal...its ridiculous.
No risk? are you kidding me? this is an llc's/bd's RIGHT to take an override. do you know how hard it is to start one from scratch? theres a reason theres always 2 folks involved in a llc/bd. even as a profitable trader making 200k a year, you'd have to save for almost a decade before you had enough money to barely leverage a group/ to start completely on your own (not owning a retarded branch)
take that, and the fact that some little piker might be leaning on a big bid massively, then its halted, and now your llc just evaporated. anybody running an llc/bd giving out 100's and choosing NOT to make money on overrides is ridiculous, its their right.
