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I am trying to chose my first broker and was wondering if commissions transparency is important to you traders.
For example, Velocity Futures gives all their markets commissions (in relation to volume) on their website. Public and transparent information. Other brokers give you the commissions to the markets you ask for and do not put this information public.
This means when commissions are transparent you know all in advance.
But, when it is not transparent, like with most brokers, it means the only moment you can really "negotiate" the commission is before opening the account. This can be a problem.
What are your pros/cons on commission transparency ? Do you consider transparency of commissions important ?
I like the brokers who list everything up front. They give discounts for volume.
I have personally experienced in the past with other brokers where they would tell you one price during your "negotiations", but then charge you something entirely different. It is my guess that majority of traders never notice this, which is why they do it (because they can get away with it). They act like it was a big mistake, but I believe it wasn't. That is because it happened to my friends who funded with them as well, and each time they acted like it had never happened before.
"Transparent commissions" as you call them are really just one part of evaluating a broker.
Thank you Mike. Agree, this is only one criteria for evaluating a broker. I was wondering if it is important to others too in their broker choice before making my own opinion.
I think everyone has their own set of criteria, but here are some:
- Check NFA site for problems
- Check CFTC financial summary report for funding info
- Check futures.io (formerly BMT) broker section for reviews
- Cost of commissions
- Availability of desired platform/costs
- Location (if outside US)
- Infrastructure
- Reporting tools
- Customer portal services
- Helpfulness and availability by phone, email, live chat or whatever method you like
With the recent MFG crisis, you can add to that list whether they do any prop trading.
I am sure there are other critieria, but I am still half asleep
I like the transparency, but I don't see the commission as more important than availability by phone when something goes wrong. But that's merely how I prioritize my criteria.
There are many other good points brought up by Mike and others here and one of them is that commissions can be negotiated at any given time.
