Is this a good rate/payout schedule?

P

PTG110

Hi everyone,

I am an experienced trader who has been in the game for a while. I came across a new prop firm in my area that had an interesting way of how they do their payouts to traders on their floor (not remote). After interviewing with them, I wrote down the four different programs they offered traders and just wanted to get some feedback as I have never seen something like this before. Although after doing some calculations I can be saving myself a lot of money on ticket charges. I just wanted to get some feedback before making my decision if I want to join this new prop firm or not.

How it works is every trader gets the same ticket charge shown below, then depending upon your monthly volume and gross profits determines what payout structure you get for that month.

All floor traders: .0002 (.20 cents per 1000 shares)

Payout: 50/50
Minimum volume req: 500,000
Minimum gross req: $2,600
(min vol and gross combined)

Payout: 75/25
Minimum volume req: 2 million
Minimum gross req: $5,200
(min vol and gross combined)

Payout: 90/10
Minimum volume req: 3 million
Minimum gross req: $11,000
(min vol and gross combined)

Payout: 99/1
Minimum volume req: 5 million
Minimum gross req: $26,000
(min vol and gross combined)

Only fee to traders $179 per month platform fee.

Any feedback would be appreciated as I am from the old school and just use to paying .004 per 1000 with a 100% payout for the past five years.
 
Depends on your volume. If you are pushing 5MM shs a month and making money it seems like a great deal. If you only do 400k a month, then it sucks.
 
That's the thing, you must do both the volume and the gross amount per different payout structure. Either way it seems I will be saving a ton in commission costs. It doesn't look that great for someone who can't do over $2,600 a month gross, plus 500,000 shares but I figured they designed it like this so new traders can step up their game as well and get the next level
 
I don't see how that is possible.

5 million shares is nothing. How can they make money giving out .0002 and only keeping 1% of the traders profits?

There's just no way that would work unless the firm was letting you trade on a Commodore 64 sending smoke signals to the exchanges as their "proprietary order routing system".
 
I am interested in what the merit is in ANY of the proposed structures UNLESS you are fully capitalized by the firm (which I doubt). Why would anyone want to give more than xyz dollars away from your hard-earned dollars unless that is made up by lower commission than what you pay a regular discount broker such as IB. You pay platform fees/desk fees, so that cant be the reason. Given you put up all your own money what edge does such outlet provide over just doing it yourself.

Dont get me wrong, I am interested in trading prop because I am around others and its a lot more fun to trade that way. But I intend to put up most of my own money and thus dont see much benefits in putting up with a structure that pulls 10 or 20% out of my p&l pockets. I understand there are some guys who only got 10k and believe they can make it in trading because they can trade leveraged. I strongly disagree and they are most likely (define most likely: >95%) blow up being so undercapitalized.

So, in the end the question begs: What value do those shops add in exchange for asking for >5% of your p&l (5% was chosen deliberately because I try to keep general trading expenses below this level).

Quote from PTG110:

Hi everyone,

I am an experienced trader who has been in the game for a while. I came across a new prop firm in my area that had an interesting way of how they do their payouts to traders on their floor (not remote). After interviewing with them, I wrote down the four different programs they offered traders and just wanted to get some feedback as I have never seen something like this before. Although after doing some calculations I can be saving myself a lot of money on ticket charges. I just wanted to get some feedback before making my decision if I want to join this new prop firm or not.

How it works is every trader gets the same ticket charge shown below, then depending upon your monthly volume and gross profits determines what payout structure you get for that month.

All floor traders: .0002 (.20 cents per 1000 shares)

Payout: 50/50
Minimum volume req: 500,000
Minimum gross req: $2,600
(min vol and gross combined)

Payout: 75/25
Minimum volume req: 2 million
Minimum gross req: $5,200
(min vol and gross combined)

Payout: 90/10
Minimum volume req: 3 million
Minimum gross req: $11,000
(min vol and gross combined)

Payout: 99/1
Minimum volume req: 5 million
Minimum gross req: $26,000
(min vol and gross combined)

Only fee to traders $179 per month platform fee.

Any feedback would be appreciated as I am from the old school and just use to paying .004 per 1000 with a 100% payout for the past five years.
More...
 
Correction

This plan is 1.00 per 1000 shares as compared to the other plans which are .20 cents per 1000 shares.

Payout: 99/1
Rate: 1.00 per 1000 shares
Minimum volume req: 5 million
Minimum gross req: $26,000
(min vol and gross combined)

my mistake
 
Quote from Clubber Lang:

I don't see how that is possible.

5 million shares is nothing. How can they make money giving out .0002 and only keeping 1% of the traders profits?

There's just no way that would work unless the firm was letting you trade on a Commodore 64 sending smoke signals to the exchanges as their "proprietary order routing system".
More...

They know there is very few traders that make 26k.. from my experience your actuall payout will be 50/50... It just a numer games for them. They won't loose money if somoen is making 26k. And if someone is making 26k they can probbaly start front running his positions or telling traders who are making 3k what the guy is doing. Simple as that there is no free lunch.
 
Quote from wucah:

They know there is very few traders that make 26k.. from my experience your actuall payout will be 50/50... It just a numer games for them. They won't loose money if somoen is making 26k. And if someone is making 26k they can probbaly start front running his positions or telling traders who are making 3k what the guy is doing. Simple as that there is no free lunch.
More...

So true, A+
 
Please see me prior post.

Correction

This plan is 1.00 per 1000 shares as compared to the other plans which are .20 cents per 1000 shares.

Payout: 99/1
Rate: 1.00 per 1000 shares
Minimum volume req: 5 million
Minimum gross req: $26,000
(min vol and gross combined)
 
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