If you're a new trader, don't get so caught up about what kind of initial deal you'll get. All that matters is for you to find out if you've got what it takes to be a trader. A certain deal will not make you a better or worse trader! JUST TRADE and then deal with the commission rates afterwards! Geez, all these damn posts about Worldco, Lynx, Bright, etc is getting ridiculous. They're all the freakin' same in the end!!!...that's if you last that long.
Stop Worrying About Deals!
- Thread starter Vulva
- Start date
I somewhat agree with one caveat.
Don't worry too much about deals on commish rates since after you've established a track record you can pretty carve out a good deals sub penny per share. Most of the active traders here trade at least 25k per day and in this tight environment 1/10 of a penny will mean the difference between a plus and a minus day. The ONE thing you got to worry about are lock up / non-compete clauses. You should be able to leave and go to different firm after certain reasonable time.
Don't worry too much about deals on commish rates since after you've established a track record you can pretty carve out a good deals sub penny per share. Most of the active traders here trade at least 25k per day and in this tight environment 1/10 of a penny will mean the difference between a plus and a minus day. The ONE thing you got to worry about are lock up / non-compete clauses. You should be able to leave and go to different firm after certain reasonable time.
I agree that there is enough info on other threads to cover what deals are currently out there. We don't need a new thread on this every other day. However I disagree about the fact that you should not worry about your deal going in. Most traders starting at a prop shop want to succeed and some of the deals being thrown at the uninformed are crazy. Nobody should be paying 2 cents a share plus ticket charges. Offices and firms like this are chop shops and are not giving enough to a new trader to let them succeed. Trading is already hard enough when beginning without the excessive markups. If they were really interested in a trader doing well they would give them a deal that is actually fair to both sides. You say you can always move on once you learn how to trade, but from what I have seen after a first bad experience, and negative reinforcement of not even trading well enough to breakeven on commissions a lot of traders just move on. I was at an office like this when I started and out and of 30 traders only 4 even attempted to trade at a new firm. Lucky I learned and knew other traders in the business to keep me going.
It depends..
on the risk you are taking-if you bring in $ they have little risk, less time
on the regulating exchanges- if your pro firm is a member of PHLX you have no choice your $ stays there for a year, other firms less, other firms no holding period-read the fine print.
on the payout-more onerous payout against you less time.
on training you're going to get, - if you are new then training is pretty important (if done well) so you have to give a little on that end since they are giving you their 'secrets'
on your ability to finance yourself-main reason for pro firm used to be bullets, rates and leverage. Now a lot of retail are cheaper than pro, have bullets and with 4:1 retail gives you ENOUGH leverage to make some $, not too much to blow yourself quickly in the learning process. PLUS you don't like your broker move to the next. PLUS no LLC risk. With interest rates so low, get a loan paying 5% annually to get you over the 25K hump. Just trade real small until profitability and consistency develops.
Bottom line: if you are not making $ , who cares, but if market heats up and your making hundreds if not thousands daily it will kill you if you are paying hi commish and paying them 10-25% payout and your are stuck with them for 1-2 years.
READ THE FINE PRINT specially parts about non-compete, offsets, payouts.
on the risk you are taking-if you bring in $ they have little risk, less time
on the regulating exchanges- if your pro firm is a member of PHLX you have no choice your $ stays there for a year, other firms less, other firms no holding period-read the fine print.
on the payout-more onerous payout against you less time.
on training you're going to get, - if you are new then training is pretty important (if done well) so you have to give a little on that end since they are giving you their 'secrets'
on your ability to finance yourself-main reason for pro firm used to be bullets, rates and leverage. Now a lot of retail are cheaper than pro, have bullets and with 4:1 retail gives you ENOUGH leverage to make some $, not too much to blow yourself quickly in the learning process. PLUS you don't like your broker move to the next. PLUS no LLC risk. With interest rates so low, get a loan paying 5% annually to get you over the 25K hump. Just trade real small until profitability and consistency develops.
Bottom line: if you are not making $ , who cares, but if market heats up and your making hundreds if not thousands daily it will kill you if you are paying hi commish and paying them 10-25% payout and your are stuck with them for 1-2 years.
READ THE FINE PRINT specially parts about non-compete, offsets, payouts.
Granted experienced traders know what the deal is. However, bein new to trading and having the passion for it, I want to make sure I do not make fundamental errors in getting started. The key things I have learned from those gracious enough to share have been very reassuring.
Things such as commissions charges, sub llc structures, contracts and being locked up, firms in/outs, and just now phlx-registered making you keep accounts for 1 year are great! That's all folks.
Things such as commissions charges, sub llc structures, contracts and being locked up, firms in/outs, and just now phlx-registered making you keep accounts for 1 year are great! That's all folks.
The average commission rate for new traders these days is around 1.2 cents a share, and 4 to 5 cents on bullets, with no tickets. You want make sure that you're gonna get hands on training. Don't sign any lock up agreements, if you do that then you'll have no bargaining power during your contract term. Non-competes are ok, as long the only thing they stipulate is that you can't recruit traders from within that firm to either start your own or bring overto another firm. Which is fair cause the firm is providing you with training and proprietary ino, and they don't need moles coming in just to steal traders. That's how my firm operates, and that's why I'm with them. You can PM me for more info.
You can shop around for the best rates, but no firm is gonna bring you in for cheap commissions and provide you with good training. They'll bring you in, sit you in front of a computer with your capital, and just collect as you lose money. So don't fall for it. Also don't fall for firms that offer training though courses, again, unless they're invloved everyday with your trades, you won't learn anything outside the training course. You'd be better off spending those thousands on books, and learning yourself. Look for a firm that offers hands on training, and there are a select few out there.
You can shop around for the best rates, but no firm is gonna bring you in for cheap commissions and provide you with good training. They'll bring you in, sit you in front of a computer with your capital, and just collect as you lose money. So don't fall for it. Also don't fall for firms that offer training though courses, again, unless they're invloved everyday with your trades, you won't learn anything outside the training course. You'd be better off spending those thousands on books, and learning yourself. Look for a firm that offers hands on training, and there are a select few out there.
If you're an experienced producer, you have every right to be concerned about your deal. If you have a good track record, for a period of two or more years, you owe it to yourself to shop it around. YOU WILL GET THE ATTENTION OF OTHER FIRMS. If you're paying over one million dollars per year in commissions, pennies add up to real money. Like more than most American's annual salaries. Speaking from experience here.