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Do Brokers Need Day Traders to Fail?

Nov 22 2014 at 08:35
169 posts
If you were operating a brokerage house that had daily and weekly operating expenses that needed to be met in a timely manner, you would need a regular stream of income to match these obligations. Wouldn`t be in your best interest to encourage clients to trade as often as possible so that your revenue from commissions matches these expenses, regardless of how profitable this is for clients?

Given the difficulty of consistently modelling the random price behaviour of a financial asset class at the micro level, who benefits more from Day Trading?

Trade Less, Earn More
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