Fees for day trading?

[PixelTrader]

With fee's and commissions, how is day trading possible with the amount of trades you need to? do you just have to make a good profit on every trade to make sure you cover the fees?

 

[n7ekg]

With fee's and commissions, how is day trading possible with the amount of trades you need to? do you just have to make a good profit on every trade to make sure you cover the fees?

Yes. The fees are set per market and every trader has to pay those. Commissions can range anywhere from 50 or 60 cents per contract (if anyone knows of any lower, feel free to chime in), so unless you're making at least 1/2 to 3/4 point on every trade, you're going to make your broker richer than you'll ever be!

Most traders overtrade - and every trader has done it at one time or another. This was a good day trading for me - this was July 8-9.

Contracts R/T: 60
CostOfTrades: $300.00
P/L Gross: $1,687.50
P/L Net: $1,387.50

Most of my trades were 5 or 10 contracts, and I probably overtraded! I lost a couple of trades, too, as you can see:

OrderType IsBuy Quantity FilledPrice FilledQuantity FilledTime P/L Gross
Limit S 10 2043 10 7/8/2015 16:14
Stop B 10 2043.5 10 7/8/2015 16:24 ($250.00)
Limit B 10 2044.25 10 7/8/2015 16:52
Limit S 10 2045.25 10 7/8/2015 17:03 $500.00
Limit B 10 2045 10 7/8/2015 17:10
Limit S 10 2046 10 7/8/2015 18:10 $500.00
Limit B 10 2051.75 10 7/8/2015 21:43
Limit S 10 2052.75 10 7/8/2015 22:34 $500.00
Limit B 5 2053 5 7/8/2015 23:05
Limit S 5 2052 5 7/8/2015 23:30 ($250.00)
Limit S 5 2049.75 5 7/8/2015 23:43
Market B 10 2051 10 7/8/2015 23:46
Limit S 5 2053 5 7/8/2015 23:52 $187.50
Market S 5 2046 5 7/9/2015 12:58
Limit B 5 2044 5 7/9/2015 12:59 $500.00

As you can see, I paid about $300 in commissions and fees (my broker charges just under $5/contract, round trip, and I just averaged it up to $5).

 

[PixelTrader]

Yes. The fees are set per market and every trader has to pay those. Commissions can range anywhere from 50 or 60 cents per contract (if anyone knows of any lower, feel free to chime in), so unless you're making at least 1/2 to 3/4 point on every trade, you're going to make your broker richer than you'll ever be!

Most traders overtrade - and every trader has done it at one time or another. This was a good day trading for me - this was July 8-9.

Contracts R/T: 60
CostOfTrades: $300.00
P/L Gross: $1,687.50
P/L Net: $1,387.50

Most of my trades were 5 or 10 contracts, and I probably overtraded! I lost a couple of trades, too, as you can see:

OrderType IsBuy Quantity FilledPrice FilledQuantity FilledTime P/L Gross
Limit S 10 2043 10 7/8/2015 16:14
Stop B 10 2043.5 10 7/8/2015 16:24 ($250.00)
Limit B 10 2044.25 10 7/8/2015 16:52
Limit S 10 2045.25 10 7/8/2015 17:03 $500.00
Limit B 10 2045 10 7/8/2015 17:10
Limit S 10 2046 10 7/8/2015 18:10 $500.00
Limit B 10 2051.75 10 7/8/2015 21:43
Limit S 10 2052.75 10 7/8/2015 22:34 $500.00
Limit B 5 2053 5 7/8/2015 23:05
Limit S 5 2052 5 7/8/2015 23:30 ($250.00)
Limit S 5 2049.75 5 7/8/2015 23:43
Market B 10 2051 10 7/8/2015 23:46
Limit S 5 2053 5 7/8/2015 23:52 $187.50
Market S 5 2046 5 7/9/2015 12:58
Limit B 5 2044 5 7/9/2015 12:59 $500.00

As you can see, I paid about $300 in commissions and fees (my broker charges just under $5/contract, round trip, and I just averaged it up to $5).

Thanks for the info. I did think though that day traders all had accounts where they paid really low fees per trade? I also thought to do day trading you need $20k + to really buy the numbers of shares you need to make a profit?

 

[n7ekg]

Thanks for the info. I did think though that day traders all had accounts where they paid really low fees per trade? I also thought to do day trading you need $20k + to really buy the numbers of shares you need to make a profit?

It depends on what broker you go with. I opened my account with $5,000 and can trade up to 10 contracts. Of course, if a trade goes against me and I don't have my stops set properly, that can go pretty quickly!

There are other brokers out there that you can open an account with for as little as $2,000, maybe less, but they usually charge higher commissions. Others might be able to chime in with their experiences...

 

[PixelTrader]

It depends on what broker you go with. I opened my account with $5,000 and can trade up to 10 contracts. Of course, if a trade goes against me and I don't have my stops set properly, that can go pretty quickly!

There are other brokers out there that you can open an account with for as little as $2,000, maybe less, but they usually charge higher commissions. Others might be able to chime in with their experiences...

I've been watching a lot of the Bulls on Wallstreet vids on YouTube and I think they are able to made trades for a lot less. I'm in the UK though so I'm not sure what the day trading brokerage options there would be. Right now I'm thinking swing trading is the way to go to build up some capital to then go into day trading at some point.

 

[n7ekg]

I've been watching a lot of the Bulls on Wallstreet vids on YouTube and I think they are able to made trades for a lot less. I'm in the UK though so I'm not sure what the day trading brokerage options there would be. Right now I'm thinking swing trading is the way to go to build up some capital to then go into day trading at some point.

Well, retail traders will never be able to compete with the pros - they can afford to have tens of thousands of trades per day (or more), making 1/4 point, and make lots of money, because they have a lot lower fees and commissions (if at all). You can have fee-free and commission-free trades, too - it just costs a huge monthly fee! I've heard that it costs $30,000/month or more, so they have to trade a *lot* to make up for that...

 

[arigoldman]

Well i think n7ekg explained it very well.