If one were to build a case for the argument I made that someone couldnet do better with a firm like mine, I (me) would start with the following assumptions:
1.While it is great that every so often someone from this thread might call, get to know us and might even open an account, you are right Irby about the fact that we have no desire to center our business around the super active (10+round trip) day trader who wants to do business for $15 per trade. To me, this type of trader might do 10 trades, the firm might make $75 bucks (remember, the firm's cost on a trade isnt zero) and one error or mistake and you throw out any profit you made (assuming your firm is honorable enough to stand by the trade) as well as infringed on your hard-earned reputation. About 85% of our business (about 1100 accounts) is long term investors, position traders and other swing traders. About 15% (about 200 acounts)of our business comes from more active traders, a few (maybe about 20) daytraders, specialists from nyse and amex, brokers at other firms, institutions, and funds. The last few being probably the most profitable component of our business. The type of individual who would do great at our firm is the person doing a few tickets a day, somedays nothing, somedays 3, 4 round trips. Of our day traders, only about 5 or so do more than 6 round trips per day regularly. Note that I consider some of these traders (especially the floor brokers, specialists, etc.) some of the most skilled around. They are the individuals from whom I base much of my experiences on and I consider them some of the best. They arent in there to do 50 trades at $50 per trade. That seems like you are burning oil.
Anyway, i sort of went on a tangent to present a clearer picture of my firm, who we are, what we do, etc. so you know the basis for my argument.
Asssumption 2. That you are dealing with a firm (electronic) that doesnt make markets or act as principal...if they do they are trading against you and my odds of being right go up signficantly.
2. That you have available ALL the execution systems I could possibly offer. Because some days the otc is hot, SOES mightbe the right tool, maybe snet, maybe the phone, MAybe its not otc, somedays its NYSE. Maybe phone based or Superdot. Somedays its options on RAES on CBOE or electronic on the AMEX and other days its bulletin boards. Who knows....my feeling, you need all the tools available.
Now lets forget that we offer the full assortment of fruits and they offer limited oranges, although some do offer a nice produce department. Assuming we just talk organges, lets say oTC execution.
Can you give an order to them to set you up, right on the SOES circuit, to sell 1000 ABCD at the strong bid, and offer it on selectnet in between. What if an ECN ups the bid, can you preference selectnet the order. What if MSCO goes to a better bid, but gets hit on SOES, is SOES-Ineligible and still sitting there, refreshing the quote. Are you going to get on the back of the line on the SOES train or can you pick up the phone, turret dial MSCO and tell their trader shit or getoff thepot (excuse the bluntness vulgarity).
All the while, having SOES setup so in a split second you can get a soes execution at the price youstarted with if the stock weakens.
In the end, from my experience, there is lag time with all online internet trading, waiting for outs and cancellatin reports before you can change systems, lack of systems available, etc.
Rarely, and this might be a first, do I EVER mention a commission from my firm. But lets say we charge you $35 for a SOES oTC trade. Lets say this is $15 more than someone else who offers nothing that I mention above. You would simply need an improvement 1 time in lets round it to 6 to net the same, let alone when you get a larger improvement or you get a buy when the stock was flying and you wouldnt have gotten it at all. If you got it when you wouldn't hav gotten it at all, you can't compare commission, because on one hand you have a commission and ownstock that is up, the other you have no commission.
As for "relaying order", I would ask anyone reading this thread to call us at 800-221-5676 and say hello. Please dont just hang up...Say hi, ask for me (obviously you might have to wait a second but the person who picked up the phone could have executed your SOES trade in about 3 seconds) You will see our trades snag the phone in 1 ring, so you would have a report on a SOES trade in three/four seconds....Sure if all you are doing is banging non-moving soes stocks, then some of these firms might be fine. But I assume people are doing more than just SOES and non-moving stocks.
Let me also say this. While infact a post like this and an argument like this with Irby is somewhat self-serving, I am presenting it for a couple of reasons: 1) I truly believe in my position and believe that most investors don't know what kind of services a firm like mine offers and are solely lured by the cheapest commissions without thorught to net costs, 2) it is an interesting argument coming from the believer of old "call your trader" school vs. a thread of superactive internet traders. (nothing like some controversy to spur an education discussion) 3) yes, infact it is kind of self serving and as everyone knows, I will on occassion toss this kind of thing up there, with the knowledge that I always tell it like it is, or atleast how I truly feel it is. I do it because I contribute to this thread on many occassions and listen to a lot of talk about online firms this, and online that, which I totally disagree with (for the most part)...on occassion, I state what I believe in. I would state it even if I didn't work here. Also, I am a trader and not a commissioned person, I don't make one dollar more for anyone that has come to us from the internet, outside of the indirect benefit to the firm (and the client) which trickles down to me (the enjoyment I get from being the room for an hour a day to screw around online, to host the chat etc.)
Lets argue it a bit. Maybe you can convince me or maybe I can convince you. Hopefully its a good one.
Regards,
Steve@yamner.com |
