Brokerage and Taxes form a very big part of any day trader's P/L .
- 50% of p&l is being eaten away by commissions and taxes . Even with low commissions for high volume traders taxes form an amount equal to brokerage.
- It is difficult to fight the vig if the trader is fixated on the market gyrations and start over trading.
- Dr Brett has an excellent piece as always here on Over trading.Comments to the post are also very readable.
- Vig, Spread and slippage are the three enemies of any Day trader. I have often seen upwards of 25% spreads being routinely quoted and being bought in Options market particularly in stock options. The trader is being butchered alive in the stock option market with these spreads.
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