Questions / Quant trading, Numerical judgment
When a fixed fee starts to pay off
Two brokers offer identical execution. Broker A charges $36 per order plus $0.002 per share; Broker B charges $0.008 per share with no fixed fee. For one order, at what whole number of shares are their fees equal?
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Answer: 6000 shares
- Equating 36 + 0.002q and 0.008q gives 36 = 0.006q. Therefore the break-even order contains 6,000 shares.
Interview shortcut. Fixed fee ÷ per-share difference: 36/0.006.
In the app this has a follow-up where one thing about the setup changes. Try the follow-up.