Holy Cow! Velocity commisions just became a joke!

[ofthomas]

Quote from Maverick74:

Why not just pay for X-Trader and get the reduced rates?

exactly... but if the "trader" is not profitable... they will have to pay $800 for 1 market or $1700 for all (hey, you get the spreader at least! ) ... so doubt someone with less than a $25K account can really afford it... so they should just deal with the higher cost of doing business unless they are doing over 300 or 600 trips depending on the markets traded... if they are above those volumes, then they might as well do the platform cost... but otherwise, they are better off having the variable expense built into the transaction cost... easy math...

 

[Maverick74]

Quote from ofthomas:

exactly... but if the "trader" is not profitable... they will have to pay $800 for 1 market or $1700 for all (hey, you get the spreader at least! ) ... so doubt someone with less than a $25K account can really afford it... so they should just deal with the higher cost of doing business unless they are doing over 300 or 600 trips depending on the markets traded... if they are above those volumes, then they might as well do the platform cost... but otherwise, they are better off having the variable expense built into the transaction cost... easy math...

Yeah I was waiting for him to tell me he does 7 contracts a month and it's not worth it to pay the license for TT himself in which I would have explained that is why Velocity is getting killed on the deal. They make $10 a month in commish and pay $800 a month for TT for him. LOL.

 

[ChkitOut]

Quote from Maverick74:

and pay $800 a month for TT for him. LOL.

are you pulling this number out of your butt?

no way are they paying 800 per user. they would be out of business.

i thought you were knowledgeable about this business, apparently you're not, you are just another moron that spews stupid nonsense.

 

[ChkitOut]

and did tt increase there licence fee's by 50% that they needed to pass on to there traders? umm, probably not.

again, they raise rates by 50% and give no reason why while at the same time advertise FREE xtrader.

if you ask me, thats very unethical, they need to reconsider how they do business.

 

[Maverick74]

Quote from ChkitOut:

are you pulling this number out of your butt?

no way are they paying 800 per user. they would be out of business.

i thought you were knowledgeable about this business, apparently you're not, you are just another moron that spews stupid nonsense.

Actually I think the TT license is $625 not $800. I think the 800 is with the 2nd exchange. And YES, Velocity pays that. They do NOT get a discount. I know one of the top sales guys there. When I ran a prop office he use to take me out to dinner and try to sell me TT to our traders. We tried for years to get discounts. It was full license. So no, your $15 dollars in commissions a month is not going to cover their expense.

 

[traderslair]

Velocity is a broker who is barely making any money. They suffer from volume drop and lost a few really big traders.

Wouldn't be surprised to see them gone / taken over in 6 months.

DDT, deepdiscounttrading.com is much better for small retail traders.

 

[comintel]

Quote from ChkitOut:

4.52. quite the jump huh.

Not only that there is an "monthly maintenance fee" for "free" Xtrader:

Gotcha!

http://www.tradewithvelocity.com/policy-disclosures/fee-schedule.aspx

USD - $75.00
EUR - €75.00
GBP - ₤75.00 Applies to accounts with X_TRADER free (1 exchange) only. Waived if 50+ contracts traded each month. This fee will be accessed in the currency that holds the most funds.

However, in fairness, they have posted in the past that fees are negotiable and that they will match other brokers on request.....

 

[Brighton]

If the lowest tier in volume (highest in price) costs $6.65 per round turn, and they are simply a conduit for $1.14 (ES) up to $4.04 (NYBOT softs) in exchange and NFA fees, that leaves from $5.51 (ES) to $2.61 (softs) in gross margin per round turn.

I'll make a SWAG of $4.00 gross margin using the assumption that their activity is weighted toward things like ES and TF that carry lower exchange fees.

If Maverick's figure of $625/mo in platform fees is correct, then a retail trader has to generate at least 156 RT trades/mo before they start contributing to the firm's overhead.

Further, even if the small retail guys have a lot of money in their accounts, which by definition, usually isn't the case, brokers don't earn much interest on it these days (see Corzine, temptation).

Sounds like a rotten business plan. If the numbers above are reasonably accurate, it makes you wonder why they bother soliciting small volume traders and offering the "free" X-Trader, knowing that very few of them are ever going to become large volume traders.

 

[comintel]

Quote from Brighton:

.......

If Maverick's figure of $625/mo in platform fees is correct, then a retail trader has to generate at least 156 RT trades/mo before they start contributing to the firm's overhead.
......

A monthly platform fee is charged to the customer separately.

See

http://www.tradewithvelocity.com/policy-disclosures/fee-schedule.aspx

Monthly Maintenance Fee

USD - $30.00
EUR - €30.00
GBP - ₤30.00
WAIVED FOR ACCOUNTS WITH BALANCES EXCEEDING $100K
Applies to accounts with active trading platforms only. Waived if 50+ contracts traded each month or active platform is X_TRADER® Subscription or CQG Integrated Client. This fee will be accessed in the currency that holds the most funds.

USD - $75.00
EUR - €75.00
GBP - ₤75.00
Applies to accounts with X_TRADER free (1 exchange) only. Waived if 50+ contracts traded each month. This fee will be accessed in the currency that holds the most funds.

 

[Brighton]

OK. I think my post is way off then. I glanced at the site and they charge up $7 to $8 RT for the agricultural and energy contracts under the "X-Trdr Free" tab. Must be some platform because those are steep commissions for the self-directed trader.