Many beginners are unaware that there are critical differences between pay-per-trade

and pay-per-share online brokers.


If your commission fees are based on pay-per-trade, then you’re usually paying

$5 to $10 per trade. Most amateur day traders use pay-per-trade brokers because

they don’t know about the pay-per-share alternative. I sure wish I’d been informed

about pay-per-share when I started day-trading stocks.


Why use pay-per-share firms? On average, you only pay .003 to .006 cents per

share. That translates to paying, on average, 45 cents per trade, when you’re trading

in 100-share blocks.


On the other hand, if you place a trade of 100 shares with a pay-per-trade broker, you’re

usually charged a flat rate commission of $9.99. Compare that to a pay-per-share firm

and this truism will hit you like a hammer.


If you place over 50 trades per day with pay-per-trade, imagine how gouged you’ll get

by fees. Most active professional day traders, like myself, place at least fifty trades per

day (25 round-trip trades). If they use a pay-per-trade broker, that’s roughly $500 per

day in paid commission fees. Trading through a pay-per-share broker, however, placing

fifty trades per day in 100 share blocks, costs you only $15-30 in fees.


You can see just how crucial it is for a pro to use a pay-per-share broker.

The day-trading seminars and training programs usually don’t tell you about

pay-per-share. The reason is that most training programs have contracts with pay-per-trade

brokers. This enables such brokers to profit off you. They register you onto their trading

platforms, during the training program.


When I think of that, the word “racket” comes to mind.


Pay-per-share firms don’t advertise in prime time commercials, so you only hear about

them from experienced people like me. Because they seek only serious day traders, they

prefer to keep a low profile.


So if you plan on becoming a highly active independent day-trader, remember I told you

about pay-per-share. Once again, find out whether the training programs teach you about

pay-per-share. If not, hang up the phone.


Pay-per-share providers are usually referred to as Direct Market Access trading firms or

Proprietary Equity trading firms, and they all offer real Direct Market Access trading

platforms, with FAST KEY capabilities. This is what the real pros use.



What’s the catch? Amateurs ask me.



First off, when you trade through a pay-per-share broker, there’s no scammy catch at all.
It’s all about becoming more professional. If you plan on evolving to a “pattern day trader”,
which means you plan to make several intra-day round-trip trades, then you need a
pay-per-share broker. One condition is out there that I suppose you could call a catch,
but it’s really a form of promotion: when you begin to advance as a day-trader, which
naturally involves pay-per-share, you’ll find yourself being regulated
by the S.E.C.

TWO reason’s that usually scare off amateur day traders:

– To begin trading, the S.E.C requires you to have a minimum of 25K. The balance of
your account cannot fall below that when intra-day-trading stocks. If it does drop below that

amount, you get hit with an “equity call”. That means that you can’t trade on margin until you
deposit enough funds to return your balance up to 25k.


– The pay-per-share firms that supply the direct access trading platforms charge for their data
feeds. Those monthly data access fees usually amount to about $150-$200 per month.


If you’re turned off by those barriers to entry, then most likely you’re not destined for
professional day-trading. Fact: if you want to day-trade for a living, then you need to make
several intra-day trades without getting constantly hit in the wallet by those whopping
pay-per-trade commissions.