Darren & Brentsky, I received a note from Brent regarding the fee schedules, and started pouring over my trades trying to analyze what this new fee schedule that goes into effect on July 1st would mean to me, and then to figure out what it would be mean others that traded less frequently.
Up until now I've been charged a flat 19.95 per trade with free data feed. Even that is confusing, because of added charges SEC, SOES, Intelinet, etc. making the average ticket about $21.
I must admit Darren, your scenario of $15 per trade makes for a good reference point. With my average ticket being $21 or $6 per ticket more, the outcome of my trading activity over the past 3 months would have probably saved me in excess of $5,000 in commissions, and would have certainly made a substantial difference to overall outcome.
I am a highly active trader, producing a minimum of 20 trades per day, with 40 being more the average during normal market conditions. So 40 x $6 = $240 per day or $1200 per week of extra luggage that I must clear, when $15 is used as a reference point. To be charged even a $1 more ($16) per trade would equal $200 per week or $800 per month more.
Granted the software is "far beyond" any other system in the market place today. In all fairness that is certainly worth something, so are the data feeds, and even the excellent customer service to some degree has some intrinsic $ value. But, the real question is how much is it worth, certainly not $1200 per week in additional overhead, at least not in my case. So what is fair? It is my feeling that $16 to $17 per trade should more than cover any costs Cybercorp absorbs in providing those services, and still reflect a competitive and profitable scenario for all parties concerned.
I plan to call Mark Stryker on Monday and discuss this with him, as July 1st is just around the corner, and I will be forced to make decisions based on economics, not emotional decisions based on "Gee Whiz" technology.
In closing, I have a few other closing considerations, pertaining to:
1) a fee schedule being based on your previous months trading activity.
Granted there must be a standardized method to gauge a persons fee schedule. Unfortunately though we are in a business that is dictated by fluctuating market conditions and sometimes it just isn't prudent to be trading actively. Thus you are penalized for being a prudent trader. Just a thought.
2) that fees should be based on round-trip pricing. For example, with most brokerages, any trades consisting of a single issue, in the same direction, in the same day, are clustered as one trade. For example, a sell of 500 NOVL @ 12 + 500 NOVL at 11.88 + 500 @ 11.75 all in the same day, even on separate order tickets should constitute one trade of 1500 shares of NOVL and therefore one commission fee.
As it stands now, you are given 5 minutes to execute your trade to receive the 1 ticket rule. Unfortunately if you trade in lots bigger than 1000 and need to enter/exit a position using SOES, the 5 minute rule negates your doing so, thus you would be penalized with multiple tickets/fees.
I happen to love CyberTrader software and data services provided, not to mention that I also think very highly of Cyber-Corp and it's people. It would truly be a shame to see all their hard work go down the drain due to a judgement error based on non-competitive pricing.
Unfortunately, the difference between failure or success of many young companies, rests on making one crucial business decision. A pivotal choice between higher profit margins or building market share through volume.
As a retired marketing professional, it will be interesting to see what fork in the road they will choose.
If they choose to go with higher profitability, I can certainly understand their motivation and reasoning. After all, survival is their primary objective, especially in this vulnerable phase of development.
It is however a two edged sword.
How does one garner volume without being competitive?
It depends on CyberCorps intended niche market.
Are they focusing on wholesale accounts as their core base, with any retail customers only being a secondary consideration?
If so, then maybe the answer is written on the wall as to where you stand in the scheme of things.
But, it is my perception that Cyber-corp really does want to pursue the retail customer as their core niche, and use wholesale accounts only as a staple.
Therefore, I see the coming month as a turning point in their ability to survive and prosper.
They have before them an unprecedented opportunity to explode upon the scene as a leader, a benchmark for all others to follow. By providing superior product/services at competitive pricing they can literally capture the market. The time is ripe, and I would hope they recognize this rare window of opportunity.
Now is the time for CyberCorp to be aggressive in their pricing policies. In doing so, it would validate their faith and commitment regarding the efforts expended to bring us the best of the best.
Hopefully they hear our passionate pleas, as I think it is fair to say that we all wish for their survival and success.
Raleigh |
