Is this correct? The base is higher than any competitor out there that I can find, plus the real shocker is the ECN fees (for ISLD, TNTO, ATTN and Bloomberg) which are .015 a share or $15.00 per thousand. Now I know that ATTN and Bloomberg are usually extra charges, but what is the deal with ISLD and TNTO.
*** Don't read this unless you've taken a big swipe off the salt lick first -- it's just my opinion and not a condemnation of any one particular brokerage... ***
Yep, that's the new fee schedule, for less than 200 trades. And yes, you aren't the only one that has been having a problem with it. I've been thinking about it all weekend. And for that premium rate, you pay an additional $300 for feeds, which has never really bothered me, because I pay for feeds now, but high commissions are the death of average traders, of which I certainly qualify. Your fees are a little off for ISLD (0.0015 per share). $1.50 per 1000 shares additional.
My feeling has always been that a trader, no matter how good, cannot make decent money unless commissions are $15.00. It's not the winners that hurt you with the extra $18 per round trip on a $24.00 ticket, it's the losers and no trader is perfect. Basically, with ECN fees, SOES tax, whatever, you are talking over $50 per trade if you trade with CyberCorp. That essentially eliminates the teenie winner, which means you must scalp for the 1/8th, which is far riskier, causing more losers, making less and less money for yourself, and making you less willing to take chances, meaning fewer trades and even higher commissions...it's a dangerous cycle, and one that turns a solid brokerage house into nothing more than a "bucket shop."
Houses that cater to traders with $15 commissions, per share costs instead of per trade costs (to guard against you having to pay $23.95 for a split fill of 25 shares), and discounts to new traders who need to be floated for a month or two tend to keep their customers much more than houses that grind traders to the bone and then just look for a new crop every six months. I'm certainly not claiming CyberCorp is grinding their traders, but it was hard enough to adjust to $19.95 commissions, and not being a high volume trader, the new commission schedule is pretty much enough to put me over the edge...especially considering the additional costs of remote access, and the lack of amenities that are available in most offices. I have found that the best places to trade are offices run by traders, not by managers, because traders have been there and managers either were never good traders in the first place or have never traded. The bottom line is, high volume-low price or low volume-high price are usually the two choices a brokerage house must make; traders prefer the option of high volume when they can afford it, and the benefit of low prices when they are in bad trading cycles. Brokerage houses have bills to pay and must make money somehow each month. But high volume-high price is great for the brokerage, and pure alienation for the trader.
As a final example, imagine you Brentsky trading with CyberCorp. You want to get started with 500 shares because you are new at this and you don't feel comfortable. Each time you make a teenie on $500 shares, you LOSE $22.50. Each time you make 1/8th, you make $12.50. Forget less than 500 shares, you'd never make money...but you trade 500 shares 200 times, make 1/8th 150 times, lose 1/8th 50 times (so you are better than most, right 75% of the time) and here's the breakdown: 150 winners ($9,375), 50 losers (-$3,125), commissions (-$5,000), making you a grand total of $1,250 your first 200 trades (i.e. your first month, and assuming 1/8th losers, which is a stretch at best). On 1,000 shares, you make $7,500, CyberCorp makes $5,000. And that's if you are right 75% of the time, which just happens to be my current percentage and I've been trading almost a year. How are you going to make it if you don't have much experience? You aren't.
This is the problem, and those of us that love Cybertrader software and have become accustomed to dealing with some first rate people for the last three months now have some decisions to make -- do we take the additional risk for the benefit of a fine broker, or do we just move on, like so many others do... |
