If you have been looking into day trading and wondering what a day trader salary really is or how much do day traders make, do not expect to get such finite numbers when thinking of potential income by day trading. This is because in day trading, just like many other forms of trading out there, there are a host of factors in play to determine the amount of money you can actually make.
This article delves deep into a day trader salary and gives you some hard cold reliable numbers, and not the fluff about day trader’s salaries you are most likely to find on the web.
How Much Day Traders Make if Joining A Company
For many investment houses, you are most likely to earn a decent basic salary that is just enough to keep you at the lower middle class in New York. This is just about US $50,000 to $70,000. Basically, this is just enough to pay for your cable bills, have some meals, do some shopping, and maybe take a taxi.
On average, a stock trader in New York working under an investment house a day trader’s salary can earn between $250,000 to $500,000 day trading if they are above average. If they are in the middle range, they can expect between $100,000 and $175,000. But remember, there are also top hedge fund/stock traders here that make billions annually.
Working for an investment house offers benefits such as a salary, health cover, prestige, no risk of personal capital and moving up corporate ranks with possibilities of managing multiple funds. However, on the downside you have to engage with clients, get into office politics, and take home only 20%of profits.
Stock Trader Salary if Joining A Prop Firm
On average, an above average stock trader working for a prop firm is likely to make about $150,000 to $250,000 while an average day trader will do about 60,000 to 100,000k annually. Traders for prop firms make less than those in investment houses because prop firms have limited access to capital.
The benefits of working here include generally splitting profits with the firm, low commission rates, no bosses and increase margin. However, on the down side, you have to use your own capital to start trading, limited training, no health benefits or paid time off, no career progression and loss of personal wealth.
Day Trader Salary if Trading for Yourself
When it comes to day trading by yourself, your earning potential will be directly proportional to your starting capital and monthly expenses.
With a starting capital of $100,000 to $250,000
- An average day trader gets a 20% annual return which translates to about $20,000 to $50,000 annually.
- An above average day trader makes a 50% annual return which translates to about $50,000 to $125,000 annually.
- At the top stock trader gets 100%+ which is $100,000 to $250,000 and beyond.
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