How Much Money I Spend as a Day Trader
Day trading is a business, not a hobby. Just like any business, it takes a lot of capital investment and operating expenses to make more profits.
I see many beginner traders online trying to avoid commissions or paying for premium subscriptions, but if you’re running a business and trying to scale up, you can’t be cheaping out by trying to cut corners.
Once you’ve figured out a few trading setups and strategies that work well, it’s time to invest more money into this business to make more profits.
In this article, I want to break down exactly how much money I spend for day trading in all of these different categories, such as trading platforms, tools, commissions, locate fees, and many many more.
I’ll also explain the purpose of each of these expenses and how they are beneficial to my trading style. I use many of these tools to scan for stocks to trade, analyze stock structure, research fundamentals and execute those ideas the fastest way possible.
Market Data and Trading Platform Fees
So let’s start with the first category, market data & trading platform fees. I get this question a lot on all of my Youtube videos, “which day trading platform do you use, and which one is the fastest and best for day trading?”
My answer to that… hands down is DAS Trader pro. A very common misconception many new traders have is thinking DAS trader pro is a broker; it’s not. DAS Trader is a direct access market data provider that allows traders to execute orders on various platforms.
The reason many professional traders choose to execute their trades on DAS platform instead of the default from their brokers is of course the low latency order fills and reliability of their platform.
DAS Trader Pro
That's why I use DAS trader pro, have it connected with various brokers and pay for multiple subscriptions per month. Yes, the speedy executions are worth it. There are various brokers that offer Das trader connections, like Interactive brokers, Centerpoint, Cobra Trading, Lightspeed, CMEG and even Thinkorswim.
If you do not connect your broker to DAS Trader pro, by itself, it’s a real-time trading simulator. You can essentially paper trade with live market data and execute your trades this way. The DAS trader platform also has a very useful feature called Stream Replay Mode, which essentially allows you to go back in time and execute historical price action of any given stock on their platform. If you want to backtest your strategies and set ups, this feature would be very useful for you.
I have three separate DAS Trader pro Elite subscriptions, one for each connection to my three brokers (Interactive brokers, cobra trading, and centerpoint securities.)
However, if you trade enough order volume, some brokers will waive the platform fee, so you essentially get a free $175 credit each month, and some brokers will even give you additional discounts on commissions and locate fees.
That’s why my platform fees at Cobra trading is actually $0. I also have a Replay add-on for an additional $15 per month. The total cost for my day trading data & platform fees comes out to $365 per month.
Research Platforms
We are just getting started with the day trading spendings. Next up, let’s look at our day trading research platforms, such as scanners, newswire and SEC Filings research.
The top stock scanner I've been using for many many years now, and it’s one I'm paying annual subscriptions for, is Trade Ideas.
Trade Ideas
This is the technical scanner I use every single morning premarket to scan for gappers, whether it’s small caps, large caps, or even the overnight gap downs.
I also use the stock detail analysis tool on Trade Ideas to quickly analyze the stock’s float, market cap, and short interest. This is an extremely useful tool for me to do some quick analysis on the fly when the scanner picks up a low float runner in play. It’s definitely an essential tool to my trade planning every single morning.
I use Trade Ideas standard subscription with the monthly cost being $118 a month. I pay for an annual subscription plan at $1,068 and got it with a 15% off discount, so the cost is $908 per year; that would be $76 per month.
Benzinga Pro
The next research tool is for news. I personally use Benzinga pro. Benzinga pro is essentially a newsfeed service, but it also has some technical scanner components to it in the movers feature.
I go to Benzinga to do my fundamental and news research. I want to know why the stock is up in the first place. Is it because they had FDA approval, was it a phase 1 or phase 2 trial, or was it because of earnings and guidance?
If it is earnings, what are the numbers like for earnings per sure, revenue growth etc.? All of these are important headlines that we as traders need to know before buying or selling a stock.
Another extremely useful feature on Benzinga is the squawk box. You can use this to listen live to Benzinga Charlie, aka my husband. Yes, that's right. Benzinga Charlie is my one true love, the source of my happiness, which I also pay $950 a year for.
See, money can buy you happiness.
Okay, sorry. I got a bit carried away there. The Squawk box feature is useful because you can hear Benzinga Charlie say out loud the real-time news alerts. Sometimes on squawk when Benzinga Charlie goes on break, you’ll hear this other guy say other things. That’s when I just tune out.
I don't know his name, but let’s call him Bagholder Mike. I think I like Charlie more though, but I might be biased.
The regular cost for Benzinga Pro is $177 per month. However, just like Trade Ideas, I've been on the annual plan for years. The annual cost is now $1,400. However, I’m on the grandfathered plan of around $900 per year before they raised their prices.
That’s also after a 25% discount with a code I used when I first purchased many years ago. Therefore, I spend about $75 per month on Benzinga pro.
Again, I would only recommend tools I personally use and like for day trading, and I’ve personally been using and paying for all of these tools for many many years now.
Briefing
The next news platform I use is Briefing. This is also a premium service for news and fundamental research for trading.
I mostly only use briefing for reading large-cap stock earnings reports and the details of the conference calls. This may include whether the company made any comments on guidance and future outlooks or any major fundamental changes that would move the price of the stock short term for day trading.
There are a few other features that I rarely use, but I think they are worth noting, such as economic calendars, stock splits, IPO reports, and various ideas for swing trading as well as long-term investing. These are features that could be really useful for swing traders and investors.
I don’t think there is an annual subscription or any discounts for Briefing, so I pay the monthly plan of $89 per month.
FlashSEC
The last of the research tools I use is called FlashSEC. I’ve tried out many premium websites for SEC filings research over the years, and this one is definitely my favorite. I pay a monthly subscription of $44 a month.
Broker Fees
Alright, let’s move on to perhaps the most exciting day trading expense category, broker fees, such as trading commissions and short locate fees. Now, I’m sure many of you must be wondering, “Omg humbled trader, why are you paying for broker commission? You can trade for free with so many $0 commission broker apps now on your phone.”
Sigh. I think for beginner traders starting out, it’s totally fine to play around trading on these free commission brokers like Robinhood, Webull and many others. If you want to start taking trading seriously as a full-time career, using premium trading brokers on the desktop that require you to pay commissions is 100% worth it.
My stance is, I don’t want to save pennies on commissions and lose dollars in profits. Plus, all of these fees including the subscription tools I mentioned earlier are tax write-offs for day trading income, since they are all business expenses.
I trade with three different brokers. On interactive brokers and CenterPoint, it’s very simple for me to find the total cost of commissions and other fees each month. However, it’s nearly impossible to do so on Cobra Trading.
If you guys recall a video I had done revealing my broker statements, I literally had to scroll down the PDF statement line by line. There is no automatic calculation of pnl, commission costs and locate costs per month or per year. There was also no CSV data export either.
Dear Cobra trading team, if you’re reading this, I love you guys as my trading broker, especially your discounted commissions and locate fees, but please please please upgrade or optimize your client portal so it’s easier for traders like me to account for all the fees, especially when it comes to doing taxes in the spring.
I’m simply going to find the broker fees from the highest trading volume month and the lowest volume trading month and find the average number there. The numbers are not going to be 100% accurate, but I’m doing my best here for you guys okay!
This article is for your information only. All the figures are of course dependent on your trading volume, whether you can get rebates from routes or whether you are long or short biased and of course depends on which brokers you are using to day trade.
With that said, on rough estimate, I spend around an average of $3,500 on commissions, and $2,500 on short locate fees per month.
To be honest, this is not bad at all, especially when it comes to the short locate fees. This year, I’m very conscious of which stocks I locate short. After switching my primary shorting broker from Centerpoint to Cobra trading, I’m saving more than 25% on short locate fees.
They also provide many of the stocks to short free of charge and a lot of commission discounts after you trade a certain volume per month. If you have capital of more than $30K, I would highly recommend using Cobra trading.
Again, I personally use and love using this broker-to-day trade. They have helped me save a lot of money and make a lot of money this year. That's why I highly recommend them.
Conclusion
Now that we’ve gone through all the major categories of all the expenses I spend each month in order to day trade, we have a grand total of $6,649 of costs per month, which adds up to $79,788 US dollars a year.
Remember traders, day trading is a business, and if you want to take this business seriously, you need to spend money investing in the business and scale-up. Rather than spending $10 to make $100, I would much rather spend more money such as $100 to make $1,000. It’s the same concept in day trading.
That being said, all that 79K of expenses can be used as tax deductions against my day trading profits. If I made $400K in profit this year, I can deduct those expenses against my income. Therefore, only $321K of that income is taxable.
With this example, not taking into account the currency exchange, in British Columbia, I could be saving over 2.75% the average tax rate, or $42K.
