Quote from EricP:
WTS is charging 20-30 cents per 1000 shares. If another firm is charging 2-3 DOLLARS per 1000 shares, I would certainly see where they would have more money to show. But, the second firm's money is really just their traders money that they have taken in the form of excessive commissions. I'm not sure that's the kind of firm that I'd be interested in.
By your logic, it might be better yet to go with E*Trade, at a huge commission rate because, geez, look at their balance sheet!!!!!!!
The best option, clearly, is to get to the point where you can go retail with a strong clearing firm, and negotiate the lowest possible commissions. This way, your capital has better protection than the strongest prop firm, and your commissions are as low as possible. If this is not an option, then a trader must balance between their risk to capital (and their IS risk to their capital with any prop firm) and the associated commission rates at the various prop options.
It would be crazy to underestimate the low term impact of high commission costs. For a trader doing 2M shares per month, the difference between 30 cents per 1000 shares and $2.50 per 1000 shares is $4600 per month! After six months, this trader saves $27,600 by having his account at the less expensive firm. Considering that this trader might only have a capital deposit of $10,000 that is 'at risk', he could withstand the complete loss of his capital to the less expense firm after six months and still come out way ahead financially. Anyway, just wanting to point out what should be obvious: Commission rates are extremely important, and often make the difference between surviving as a trader and the end of a trading career.
