Many brokers offer tiered commission by monthly volume. Whether chasing the next tier makes sense is simple arithmetic.
A worked example with illustrative numbers:
- Standard: $7 per lot round turn.
- Over 50 lots a month: $6.
- Over 200 lots: $5.
A trader doing 80 lots a month saves $1 per lot on the 30 lots above 50 if the tier applies marginally, or on all 80 if it applies to the whole month. Ask which. The difference is $30 versus $80.
Risks of chasing a tier:
- Trading more to reach it. Extra trades that aren't good trades cost far more than the discount saves.
- Rebates paid later or under conditions, rather than charged at the lower rate.
How to evaluate: compute your current average volume and see whether you'd reach the tier without changing anything. If you would, ask for it. If you wouldn't, ignore it.
Does your broker apply tiers to the whole month or only above the threshold?
