Prop commission negotiation

HungryMind1200

HungryMind1200

I've seen this thread before. My apologies for being redundant, but what do you guys consider the "going rate" for commissions and data fees?


I pay $300/month for Takion DMA.
I pay $1.50 per trade. actually that's per fill, which is a whole other fiasco as my orders are getting "chopped" up and filled in single 1-lots. I need to figure out whats going on there...


I started with this firm as a newbie trader who only traded maybe 1000 shares a day. It's only been about 3.5 months, but today I'm trading anywhere between 10000- 20000 shares per day. I giving my prop firm $100+ in commissions per day.


This is not working out for me. I'm going to have to negotiate with my firm and if they are unwilling to budge, then I am going to ask them to U5 me and I will try with another firm.


What is a competitive rate that I should ask for?


Thank you.
 
CY Group:
5k deposit, 100k BP, no overnight
Sterling 130 monthly
Sterling Bootcamp Free For Two Months (Restrictions Apply)
Laser Lite 60 monthly
Data fees NYSE and Nasdaq level 2 is 65 monthly.
Full payouts
LIMIT ORDERS: $.43 per 100 shares
MARKET ORDERS: $.82 per 100 sharesIf you are actively trading over 15k shares per day or 300k shares monthly.
LIMIT ORDERS: $.18 per 100 sharesMARKET ORDERS: $.57 per 100 shares
 
Nevis: BP: 20-30x deposit
No overnight.
fusion platform $120 a month. data usually runs between 86 and 105 a month.
volumes less than 200k per month 0.005
200k - 500k 0.003
500k - 1mm 0.002
90/10 profit split
 
Chuck Krug said:
CY Group:
5k deposit, 100k BP, no overnight
LIMIT ORDERS: $.43 per 100 shares
MARKET ORDERS: $.82 per 100 sharesIf you are actively trading over 15k shares per day or 300k shares monthly.
LIMIT ORDERS: $.18 per 100 sharesMARKET ORDERS: $.57 per 100 shares
More...
Do you at least get complimentary K-Y with that ass raping?
 
HungryMind1200 said:
What is a competitive rate that I should ask for?
More...

I don't quite understand the "$1.50 per fill" commission rate, so that's something you definitely want to investigate further. Usually you pay a flat rate per share plus ECN fees.

Currently if you're paying $100 per day in commissions (not including your fixed costs) then your fees are around 2k/month, just in commission. Since you're doing about 10k-20k shares per day, if you take an average of 15k/shares/day and multiply by 20 days in a month, that's 300k/shares a month.

$2,000/300,000 is .00666/share, or roughly $7 per 1,000.

It depends on whether you are removing or adding liquidity the majority of time. If you negotiate a rate of say, .002/share and you are usually removing liquidity, then as a rough guide, simply double the rate, and that should reflect your true cost of commission, or about $4 per 1,000. You can lower the rate significantly by posting bids/offers and collecting the ECN rebates to reduce your variable costs.

Even if you U5 and allow your capital to remain at the current firm until the lock up expires, finding another firm won't do you any good unless your P&L on the 300k shares per month can justify the variable costs plus the fixed costs of platform/data.
 
====What is a competitive rate that I should ask for?===

start talking to different brokers, tell them u looking for the new broker , tell what u pay and how much u trade now, ask them if they can offer anything better than your current broker

after talking with a few brokers you will have a sense with whom to continue negotiations
 
Your not a calling brokers to open an account, that you can close at anytime. You are looking to join a Broker dealer, a regulated firm, to go into business with them for at least one year. Commissions are only one part of the decision making process.
 
Thanks guys. No I don't get any KY with my daily colonoscopy. My firm may offer it, but it's probably way over priced.


I am gross profitable, not net profitable. At least not yet, and not here. I'm disadvantaged from a negotiation standpoint because of this and also because of my short-lived track record as a prop trader.


It doesn't make sense to me to even be involved at these rates. When I joined the prop firm, I was under the impression that I would have access to some firm capital (with risk management and draw-downs in place - i.e.: I cannot LOSE any firm capital). Today, my maximum exposure is the same amount as my initial capital contribution. I have zero buying power over my capital contribution. I would have been better off staying retail, at least in retail I had a margin account. The only purpose of the firm capital is to get me over the pattern day trader requirements. Aside form that, it buys me nothing. Hindsight vision is 20/20, but again, I could put 35k into a retail account and probably be in a better position.


Considering my exposure limits, it seems impossible to turn any kind of profit with these guys. I mean sure, you can get lucky and make one trade where you earn 2+ handles on a stock listed for $6 (I could trade a whopping 1500 shares!), but you and I both know that's pretty far fetched. I like to build & manage positions, not just buy/sell and hope and prey for the best.


I am paying .008c/share - $1.50 minimum/trade. I am considering ECN fees separately. I don't want to be the guy who has a bad week or two and blames his firm, but I feel like these guys are taking me for a ride...
 
You will have to choose a strategy where the fraction of a penny is not as relevant. Rebated trading is out. Choose or learn another strategy to execute. I would also sit down with this firm and try and get them to offer you some day trading leverage as you expected. Like I said, only do business with people you trust. It a shame they are not living up to their agreement. Was the daytrading leverage in writing?
 
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