Ticket average and payout scale

J

JWest0926

Those of you trading in professional offices, what are your averages for cents per share traded? I'm trying to guage how feasible it is to average 1c, 3c, 5c per share ect.

Also for someone who is not fronting their own capital, what are the payout %s? I've seen a payout scale that pays 10% if you are making .1c per share up to 70% if you make 5c/share. What is offered with firms like bright, worldco, fnys ect?

Any replies greatly appreciated.

JW
 
Originally posted by JWest0926
Those of you trading in professional offices, what are your averages for cents per share traded? I'm trying to guage how feasible it is to average 1c, 3c, 5c per share ect.

Also for someone who is not fronting their own capital, what are the payout %s? I've seen a payout scale that pays 10% if you are making .1c per share up to 70% if you make 5c/share. What is offered with firms like bright, worldco, fnys ect?

Any replies greatly appreciated.

JW
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I assume you're talking about net averages. At my firm (which is none of those firms you listed), the successful traders generally average about 5c-20c per share, with the majority of those traders falling into the 5-10c range. That's the average obviously, and there are traders here who can consistently make 15c a share every single day, while there are others who make 60c a share some days and lose 20c a share the other days.

Since we're a prop trading firm, we only pay ECN pass-through fees and no ticket charges. That net per share gain would be quite a bit lower were we to pay ticket charges + ECN pass-throughs. Although we do have a few traders that trade their own money and pay 1.1-1.5c a share to trade and still remarkably are able to average 15-20c a share at the end of every month on a very solid net P&L.

Our payout scale goes to a maximum of 50% payout. It's recently been revamped to (finally) take into account that decimalization and the low volatility in the markets works against high ticket averages.

It basically works out that it's heavily weighted at the bottom and scales out (you can extrapolate the rest):
5c = 20%
10c = 25%
15c = 30%
20c = 35%
25c = 38%
30c = 40%
35c = 43%
40c = 45%
45c = 48%
50c = 50%
 
Originally posted by momotrader


I assume you're talking about net averages. At my firm (which is none of those firms you listed), the successful traders generally average about 5c-20c per share, with the majority of those traders falling into the 5-10c range. That's the average obviously, and there are traders here who can consistently make 15c a share every single day, while there are others who make 60c a share some days and lose 20c a share the other days.

Since we're a prop trading firm, we only pay ECN pass-through fees and no ticket charges. That net per share gain would be quite a bit lower were we to pay ticket charges + ECN pass-throughs. Although we do have a few traders that trade their own money and pay 1.1-1.5c a share to trade and still remarkably are able to average 15-20c a share at the end of every month on a very solid net P&L.
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I'm going to have go ahead and call... bulls**t on that one, Momo. 20c net per share average? I don't think so.
On 2000 shares x 25 roundtrips per day, that works out to $2.5 million a year profit. I believe Don Bright has stated before that his best traders earn about 3c - 7c per share max. And you guys make three times that?

I just wanted to get in here before Don and Hitman come piling in here.

If its true, why don't you release the name of the prop firm.

:p
 
Originally posted by BudFox


I'm going to have go ahead and call... bulls**t on that one, Momo. 20c net per share average? I don't think so.
On 2000 shares x 25 roundtrips per day, that works out to $2.5 million a year profit. I believe Don Bright has stated before that his best traders earn about 3c - 7c per share max. And you guys make three times that?

I just wanted to get in here before Don and Hitman come piling in here.

If its true, why don't you release the name of the prop firm.

:p
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Oops. My bad. I'm off by a conversion of a tenth there. We actually go by ticket averages ($/1000 shares) vs per share average. (Same basic concept though). So most of our traders average .5c-2c a share...

We do trade exclusively Nasdaq stocks while Bright and WorldCo seem to trade exclusively NYSE stocks, so there's quite a bit more churn on our end through all the little wiggles and fakeouts.

Excuse my honest error there... I think my brain was still lost in the go-go days when it *was* possible to average 20c net a share ;) it was a rather long and frustrating trading day, I'm sure you understand...

So that payout scale *should be*:
.5c = 20%
1.0c = 25%
1.5c = 30%
2.0c = 35%
2.5c = 38%
3.0c = 40%
3.5c = 43%
4.0c = 45%
4.5c = 48%
5.0c = 50%


 
Our 6 and 7 figure income traders make between 1 and 3 cents net (with a cost of around .7 per share, no tickets, and no ECN fees, with 100% payout).

The "casual trader" may make more per trade, but less in actual income.

Payouts should never be less than 30% for anyone, ever. Our "backed traders" usually start at 50% and go to 95%.

These numbers can be confusing, so as I said in your PM, feel free to call for details.
 
I wasn't trying to nitpick; I just thought you were honestly posting those performance numbers...and then going to try to sell us your new black-box system! (LOL). Anyway good luck trading. What firm did you say you were at?


Don, good job. I knew the cent per share profit was pretty low in comparison. Thanks for the lightning fast intervention on this thread.

Bud
 
I don't understand if you are trading some of these fast moving Nasdaq stocks,like QLGC and NVDA and a host of others,to make only 2 cents a share. These stocks move sometimes 1 or 2 points in a very short time frame.
 
Originally posted by Vinny1
I don't understand if you are trading some of these fast moving Nasdaq stocks,like QLGC and NVDA and a host of others,to make only 2 cents a share. These stocks move sometimes 1 or 2 points in a very short time frame.
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I agree with Vinny - why does it matter how many cents per share you make? Shouldn't the payout be based on $$$ profit or %%% profit? Can someone explain why cents per share matters?
 
Yes, stocks like QLGC and NVDA can move points at a time.

So you can make 70c, then you can lose 30c. You can make a bunch of trades when the stock pauses, trying to catch the next leg up in the move, and you can write a lot of tickets doing so.
You get charged ECN fees, write a lot of tickets, and end up with a very lot profitability average.

Unfortunately it's very easy to see these stocks on an intraday chart and say "NVDA just went up 2 points," but it's an entirely different matter to be trading that 2 point up move. I've seen traders get caught in almost a full point down-move on thousands of shares in these stocks simply because they can't get out. When those fast movers move, you have two choices 1) sit in the SOES queue and pray you're not #478182 in line to get filled by FBCO, or 2) lock down an ECN like ISLD 20 or 30c and hope you get the fill. You really have to be at/near the beginning of the move to comfortably hold throughout the entire move. And we all know how much fun it is to try to catch bottoms and short tops...

As for why per share profitability matters, it's because ECN pass-through fees are charged on a per-share basis, and prop traders don't have to pay ticket charges of (usually) around 1c a share. We have traders at our firm that will make $3000 a day, write 300 tickets (300k shares). If you're getting charged tickets + ECN fees, you've had a pretty big negative day, but as a prop trader, you've just had a positive day and the firm gets to keep a big large of your cut because of the payout scale and because of the fact that were you a *customer* and charged tickets, you'd have just lost money for the day. Instead, you just had a decent day's work.
 
Quote from Don Bright:

Our 6 and 7 figure income traders make between 1 and 3 cents net (with a cost of around .7 per share, no tickets, and no ECN fees, with 100% payout).

The "casual trader" may make more per trade, but less in actual income.

Payouts should never be less than 30% for anyone, ever. Our "backed traders" usually start at 50% and go to 95%.

These numbers can be confusing, so as I said in your PM, feel free to call for details.
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Hi Don,

Is this "rule of thumb" still applicable in today's market?

thanks,

Walter
 
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