The Best Commission Rate Ever
- Thread starter MaxGain
- Start date
Very articulate. Do you kiss your mother with that mouth?
Actually, I'm dead serious. Look, one of the lessons I have learned the hard way is that when a business relationship is one sided, it tends to hurt both parties in the long run. You are looking hard at the 'costs' of your business, but you are completely oblivious to the costs of your business partners.
If you are doing business with a firm that is not making a decent profit (not exhorbitant, just decent), they will one day go out of business. But long before they do, they will make your life miserable because they will deteriorate. Service declines, computers don't get upgraded, feeds disappear, etc. These things cost you money, but it is not as easy to tally at the end of the year.
All I am trying to point out to people is that if you want to have stable technology, a good assortment of tools, and some degree of service, you cannot also have the lowest commissions on the street, because there are a lot of POS offices right now offering whatever rate they think will get someone in the door. And what you apparently do not see is where they cut the corners to deliver those rates. My experience is that some of those cuts cost you money in ways you don't realize.
To directly answer your initial question, based upon what you laid out, you are getting a good rate, especially against the leverage and exposure you want to take with no risk management. You may be able to get where you want in the short term, but I would think anyone willing to give you everything you are asking for is most likely desperate or foolish.
i appreciate your response and did not mean to be harsh with you, its just that there are so many pikers on this site that it aggravates me sometimes when i ask a question and get lame replies. so, i apologize if i offended you.
yeah, i guess in the big picture, the deal i have is pretty solid for my style of trading and abilities. I was merely asking to see if there were firms out there that would be able to offer the things i am looking for and save me around 4000-5000 per month. knowledge is power in this industry and as you know, competition for the business of high volume traders is fierce (esp in this market). if i can save that much, it might be worth a switch IF I weighed all of the variables and everything being equal, one firm offered us a better rate. i understand risk management concerns for unproven traders, but for a firm, my group and i would not be a large risk as we are consistently profitable and very risk averse. i presume that after speaking with a firm owner, they would be comfortable with our strategies and abilities- I would have to lay everything out and negotiate accordingly. I just wanted to know if I am in the ballpark with commissions of .0035-.004 for 3-4 million shares/month with all of the concessions we would be seeking? (group- 4 people- 10-15 million/ month now- more in better market conditions) I'm not bitching about the deal I have, I am just going fishing, I suppose and seeing if I can get any bites
no harm in asking, right??
yeah, i guess in the big picture, the deal i have is pretty solid for my style of trading and abilities. I was merely asking to see if there were firms out there that would be able to offer the things i am looking for and save me around 4000-5000 per month. knowledge is power in this industry and as you know, competition for the business of high volume traders is fierce (esp in this market). if i can save that much, it might be worth a switch IF I weighed all of the variables and everything being equal, one firm offered us a better rate. i understand risk management concerns for unproven traders, but for a firm, my group and i would not be a large risk as we are consistently profitable and very risk averse. i presume that after speaking with a firm owner, they would be comfortable with our strategies and abilities- I would have to lay everything out and negotiate accordingly. I just wanted to know if I am in the ballpark with commissions of .0035-.004 for 3-4 million shares/month with all of the concessions we would be seeking? (group- 4 people- 10-15 million/ month now- more in better market conditions) I'm not bitching about the deal I have, I am just going fishing, I suppose and seeing if I can get any bites
no harm in asking, right??
No harm, no foul. Thanks for the explanation.
Assuming that stat arb/ pairs is almost all of what you do - I know where you are coming from feeling that the high buying power you need is relatively safe because of the trading style. But I have usually found, to my surprise, that a lot of guys in clearing just don't see it that way. Their take is, "yeah, 99 out of 100 times it is safe, but our job is to protect ourselves against the one that blows up".
That being said, you may be able to get a better deal for a group your size (over 10 MM shares a month) by talking directly to some of the clearing firms (and not just the usual suspects - some of the big names are getting more and more involved in day trading)
Assuming that stat arb/ pairs is almost all of what you do - I know where you are coming from feeling that the high buying power you need is relatively safe because of the trading style. But I have usually found, to my surprise, that a lot of guys in clearing just don't see it that way. Their take is, "yeah, 99 out of 100 times it is safe, but our job is to protect ourselves against the one that blows up".
That being said, you may be able to get a better deal for a group your size (over 10 MM shares a month) by talking directly to some of the clearing firms (and not just the usual suspects - some of the big names are getting more and more involved in day trading)
the thing with stat arb is that when it blows up it really blows up. there were numerous funds that got severly hurt last year. one of the biggest in manhattan cut a third of their programs after last years run. so, it's understandable why people will be a little cautious in extending leverage for a 'safe' strategy. hell, LTCM was 'stat arb'/'mkt neutral'
no, you're right, quite right....
after getting all other things in balance, and even in these markets, being able to do 5mil shares monthly, regularly, I'm surprised that you don't just go direct with a clearing agent directly, and get the rates that you desire, instead of squeezing these chop shops for bare minimum fees....
after all, that proposal beats your suggestion by, say 2cents,
but you might want to cash that in and give me change on that advise...
at this point, i do deal direct. so i'm pretty satisfied with my rates. yes, i'd agree, it's kinda suicidal to be doing 5mm a month in this market. you're just making your broker rich. the post i made about the 540k raise was really meant for new people who don't know any better and are trading at chopshops which preach churning strategies (like short-selling off of filters) and basically make their brokers and LLCs rich because they're paying .01 per share and .02 per bullet. They should realize the game and if they want to continue to trade like that they really have to look around and get their rates down, otherwise they're not traders, but more like indentured servants. the worst thing is that most of them are eating 100% of their losses from these stupid 'secured prop' deals! my advice, if you're going to trade like that, you better be paying less than .005 per share all in and close to .01 for bullets, otherwise the numbers just don't make any sense.
Trading certain _styles_, your commission _rate_ is _unconditionally_ one of the pillars of success in trading that style. Take away this pillar, and NO MATTER HOW GOOD EVERYTHING ELSE YOU DO, the edifice of successful trading will come crashing down.
If the point you are trying to make is that comissions ALONE will not make you a successful trader, you are stating a tautology.
nitro