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Dan C. sez:
> In Boca Raton there is a level 2 trading shop called Broadway Trading. I
> know one of the traders there (a kid really) netted aprox 1 million dollars
> last year while his commissions were aprox 3 million. and I doubt he would
> have cared one bit if they were 30 million or 300 million.
Well, maybe. Trading is a business. Even at current levels, your friend
is spending 75% of his gross income on commission expenses. If his
'edge' on the market (read skill or luck or whatever) slips only 25%, he
is breaking even. Any more than 25% and he is losing money big time.
Contrast that to someone who spends 10% of his gross on commissions and
other expenses. His edge would have to slip 90% before he started losing
money.
In any business, reducing expenses is just as important as increasing
gross revenues. Maybe more important if it is the sort of business that
has good times and bad times. Gotta survive the bad times so you are
still in business when the good times come back. Ask any Fortune 500
CEO.
--
Dennis
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