Prop Firms Charges Explained

[priyanknevatia]

I would like to understand the different charges and commissions charged by prop firms. I would like to know how commission works ?

So if I buy 1000 shares of X at $1 and sell it at $1.5
My gain is 0.5 * 1000 = $500
Cost = $5 per 1000 shares
So net profit = $ 495 ????

I buy 1000 shares of Y at $50 and sell it at $52
Gain = 2 * 1000 = $2000
Cost = $5 per 1000 shares
So net profit = $ 1995 ???

Am I correct ? Other than $5 per 1000 shares what will I be charged


I am just exploring the options of joining a prop trading firm in Chicago with a 10k capital contribution and 90-10 profit spilt.

 

[Doyle]

That is essentially correct, except remember to add the commission for the sell side too. So for 1000 shares it's $5 in and $5 out.

Other charges to include:
ECN charge - could be a charge or a credit based on whether you add or remove liquidity and which ECN/Exchange you traded on. (some places will include this in the $5 commission as one 'flat' rate).

SEC tax - only on the sell side, it is currently $19.20 per $1million. So the sell of 1000 @ $52 would incur a $1 charge for SEC taxes.

FINRA Trading Activity Fee - only on the sell side, $.000090 per share up to max of $4.50 (as of July 1, until then it's $.000075/$3.75).

If you are looking for a firm in Chicago, I am at Great Point Capital LLC. You can PM me or check out our website www.greatpointcapital.com.