What is a good ratio between your trading income and commision?

mrfong8 · May 27, 2005

i don't know if there is a good measure for this question.

let say if i make x amount a year trading after commision, and also pay about the same in commission. Is a 1 to 1 ratio considered efficient?

timbo · May 27, 2005

Commissions are dirt cheap.

I would be more concerned with the b/a spread. May be the MM's, dealers, and the likes will get the hint - someday.

I Missed Boat · May 27, 2005

It depends on whether you're a scalper or more of a position traders.

Bernard111 · May 27, 2005

Any opinion if you are a scalper?

kubilai · May 27, 2005

I position trade stocks and get about 7:1 for the last year, before that I was a consistent loser.

vikana · May 27, 2005

I'd like to see 10:1 on average. For instance, average gain of 10cents per share with 1 cent/share commission.

Having 10% fixed overhead is reasonable., imo. I would worry if my edge fell below 5:1

joeyata1 · May 27, 2005

lmao most on here would spend 400k of commissions if they could make 400k. thats 1-1 and few would poo poo at that. bottom line is your net. if its takes 1 million in commission to mke 500k neet thats great.now if you spend 1 million in commissions and net lose anything you're overtrading

lescor · May 27, 2005

Agreed. This topic has been discussed in the past and the people who try to make the argument about "efficient" trading are missing the point behind trading to begin with, namely net profits.

Would you rather gross $100k and pay only 5% in commissions or gross $5M and pay 95% in commissions?

j1900q · May 28, 2005

They get about 7% from me. Not too bad .
I use IB so can't do much better.
Keith

vikana · May 28, 2005

Quote from joeyata1:

lmao most on here would spend 400k of commissions if they could make 400k. hats 1-1 and few would poo poo at that. bottom line is your net. if its takes 1 million in commission to mke 500k neet thats great.now if you spend 1 million in commissions and net lose anything you're overtrading

If you can do that ... that's impressive. It just seems to me that your edge vs cost is so thin that even the smallest of mistakes or change in market will put you in the red. I would not trade a strategy with such a thin edge, but if you can ... best of luck.