Bloomberg Stocks

Bloomberg Stocks

Comparing Proprietary Day Trading Firms

If you are considering day trading stocks with a proprietary trading firm then you need to know some numbers before selecting a firm. Having these figures will help you evaluate what is the best firm for you in the big picture.

Will you have to be licensed? If so, which exams do you need? Who will pay for the exam fees? Who will pay for the annual regulatory agency fees? Who will pay for continuing education fees? Make sure you get the answers to these questions and factor in both the financial costs plus the costs of not trading due to studying, taking exams, and having to wait for all of the compliance paperwork to be completed. Daily minimums: Do you have to make a minimum number of trades per day/month? Or do you have to trade a minimum number of shares per day/month?

Percentage payout: What is the payout that you will get? Is the payout percentage after commissions and fees, or will fees be subtracted after your percentage?

Software fees: Do you have to pay for software fees? Or are your software fees waived with a minimum number of trades/shares per month?

Commissions, ECN fees, and borrowing fees: What is the commission rate you will be charged? Are ECN fees absorbed or charged/rebated? Will you be assessed any borrowing fees for leverage?

With these figures create a spreadsheet listing these values. List the figures for each firm you are considering, and create some hypothetical scenarios for: Number of trades for the month Average number of shares per trade Number of trades/shares per day Average gross profit per day

Run the analysis for each firm you are considering. Once you have your hypothetical "take home" amount per month, you have a good idea of which firm will best serve your needs assuming all of the "intangibles" are comparable between the firms.

For more free useful stock day trading tips and lessons go to: http://www.DayTradingStockTip.com.

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