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I decided not to add trading commissions because most brokers have removed them after Robinhood entered the market.
by Kibae 5y ago
I decided not to add trading commissions because most brokers have removed them after Robinhood entered the market.
- verdverm 5y agoTaxes would be a good one to add
- mypalmike 5y agoThis would all be short term trading, so it would be counted as ordinary income, which is bracketed.
- hungryforcodes 5y agoIf one of my algos makes money, I'm happy to pay.
- throwaway4good 5y agoThere is still a spread.
- throwaway4good 5y agoAnd shorting is not free.
- ucha 5y agoThere is no spread when you trade at the open and the close. There could be slippage (you can create a market impact) but it would be minimal on sectorial ETF because they are extremely liquid.
- Animats 5y agoShort selling, though, incurs an additional borrowing cost. That's been going up for ETFs since 2020. "The price of short-selling U.S. exchange-traded funds has jumped dramatically since the beginning of March as investors seek to stem heavy losses in the wake of the coronavirus epidemic, according to data from S3 Partners."[1] This needs to be re-run with the borrowing costs added. The fact that EFT short selling costs have gone up indicates that others are active in this space, which means the profit opportunities for a simple algorithm have probably been already taken. [1] https://www.reuters.com/article/us-usa-stocks-shorts-etfs-idUSKBN21642I https://www.reuters.com/article/us-usa-stocks-shorts-etfs-id...
- repsilat 5y agoIf you paired it with a "long everything" strategy (to reduce risk or whatever -- fewer eggs in this basket) the net strategy is something like "buy everything except yesterday's top performer", which can be done quite cheaply. Though fees on sector ETFs are high relative to broader ones.
- panarky 5y agoThere's no stock loan fee if you close the position the same day.