2%, 5% or 8% commision rate, which to choose?

[JasBarrow]

I posted this in another thread but it probably needs a thread of its own

If you guys were starting out again which rate would you choose? I'm a few grand down on my lifetime profit/loss but have paid quite a bit of commision to Betfair over the years (circa 10k) so i'd have to make 50k profit before being eligible for premium charge. Probably unlikely but if i became a profitable trader tomorrow would it be best to be on the 2,5 or 8% rate? (Providing I was also churning a lot of commision of course)

[rik]

2%

[Realrocknrolla]

If you left home as a teenager would you shop at Waitrose/Marks and Sparks or Aldi/Lidl?

Personally I believe the best way to save money would be pay less.

[JasBarrow]

Yeah its a no brainer starting out but what if you become a succesful trader and start paying PC2, won't it catch up on you then? Would it not have been better to have been paying 8% all along if you reach that point?

[jamesedwards]

Yeah its a no brainer starting out but what if you become a succesful trader and start paying PC2, won't it catch up on you then? Would it not have been better to have been paying 8% all along if you reach that point?

Depends on your unique circumstances. Remember that Betfair use implied commission to calculate your PC2 rate. Implied commission = (winning markets commission paid / 2) + (losing markets * 1.5%). You would need very high win-rate for your net profitability to be better off with an 8% com rate. If your game is smashing 1.01s all the time then it might be worth the 8%, but for most, the lower upfront commission rate the better. Only way to work out what is best for you is to forecast your sum of weekly winning markets and your sum of weekly losing markets and extrapolate these forward to create 'what if' scenarios based on the different commission structures.