CoachA trading firm’s volume-driven costs are the costs that grow in proportion to the business it does: exchange, clearing and brokerage fees, payments for order flow, and the financing of its positions and of the margin behind them. Its net trading revenue is its trading and commission revenue, including interest and dividends earned on positions, less its volume-driven costs.
उदाहरण
Example 1.3 (The market maker’s 2025 net trading revenue)
Virtu Financial’s 2025 income statement reports trading income of $2 436.7 million, commissions and technology services of $617.0 million, interest and dividends income of $508.8 million, and among its expenses brokerage, exchange, clearance fees and payments for order flow of $769.8 million and interest and dividends expense of $647.4 million. Its net trading revenue is million; the volume-driven costs take of the revenue before other income. Pay ($528.1 million) and the other fixed costs (communication and data $249.2 million, operations and administration $97.9 million, depreciation and amortisation $64.4 million, $411.5 million in all) leave an operating profit of $1 205.7 million, a margin of 56.2% on net trading revenue.
Example 1.6 (A firm of 100)
A firm has net trading revenue of 100, fixed pay of 15, variable pay of 30% of net revenue and other fixed costs of 35: operating profit is . With pay that flexes, and : the break-even fall is and the operating leverage 3.5. Were the same 45 of pay all salary, and : the break-even fall is and the operating leverage 5. Flexible pay turns a firm that loses money after a 20% fall into one that survives a 28% fall.