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Commission

Commissions for direct-access brokers are calculated based on volume. The more one trades, the cheaper the commission is. While a retail broker might charge $10 or more per trade regardless of the trade size, a typical direct-access broker may charge as little as $0.004 per share traded, or $0.25 per futures contract. A scalper can cover such costs with even a minimal gain.

As for the calculation method, some use pro-rata to calculate commissions and charges, where each tier of volumes charge different commissions. Other brokers use a flat-rate, where all commissions charges are based on which volume threshold one reaches.



Last Updated: 29.06.2008

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article Day Trading.

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