Market Measures

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What's Eating Your Profits?

Market Measures

We pride ourselves on our ability to be flexible in trades when initiating and managing our positions, and a lower fee structure for trading options lends to this idea greatly. Tom and Tony compare a couple of commissions schedules relative to a historically profitable trade – the iron condor – to see how the historical profits would have changed given higher commissions per trade.

The Results

The larger exemplary commissions schedule would have eaten more than 60% of the iron condor’s profit on a trade-by-trade basis. From 2005 to present, profits would have been more than double for the trader using the smaller commissions schedule versus the larger example.

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